Sweden's AP 1 forms property JV with grocery retailer

A new joint venture between the First Swedish National Pension Fund (AP 1) and Swedish grocery retail group ICA has acquired an initial portfolio of 13 ICA properties for SEK 1.1 bn (€118 mln).

Catella Corporate Finance advised on the transaction. Catella is hosting PropertyEU's Europe & Nordics Outlook briefing in Stockholm on Tuesday 1 December from 09.30 to 12.00. Click here for details of the event

AP 1 formed the joint venture called Secore Fastigheter (Secore Real Estate) with the retailer's property arm, ICA Fastigheter, to own stores in strategic locations in Sweden. Ica Fastigheter will continue to manage the assets.

The portfolio comprises 55,000 m2 of leasable area and Secore has 60% external financing.

Lena Boberg, CEO of ICA Fastigheter, said the new joint venture allowed ICA to continue to influence its strategic properties, while at the same time freeing up capital for new investment in the business. ICA Fastigheter embarked on this strategy in September last year when it sold 10 properties for SEK 918 mln to Ancore, a joint venture with Swedish pension fund Alecta. The intention is to add further properties.

AP 1 - one of Sweden's five national pension buffer funds - sees real estate as an important element of its long-term investment strategy, said Johan Magnusson, CEO of AP1. 'That’s why it is gratifying that we are now cooperating with ICA. This gives us the opportunity to invest in a portfolio consisting of retail properties that are leased on long-term contracts,' he added.

AP1 had SEK 27.7 bn of real estate at end-June this year, accounting for 9.4% of its total assets of SEK 296 bn. This is the second significant real estate joint venture backed by AP 1 in a matter of months. In August AP 1 and AP 2 formed a joint venture with US financial services group TIAA-CREF to build up a €4 bn-plus pan-European office platform.

The joint venture called Cityhold Office Partnership was seeded with €2.2 bn of core office space. The initial 15-office portfolio comprised 250,000 m2 of core office space across the UK, France and Germany. TIAA-CREF provided nine properties, with the Swedish funds contributing the other six from their own joint venture company Cityhold Property AB.

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Outlook 2016: Europe & The Nordics

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Date Dec 01, 2015
Time 09:30 - 12:00
Location Catella Corporate Finance AB, Birger Jarlsgatan 6, 4th floor
Stockholm SE-102 40, Sweden

Stockholm hosts the fourth of our Outlook series of events, now in its fourth successful year, and provides insights from leading figures on the investment outlook for real estate markets in both the Nordics and Europe.

Join the discussion, stress-test your views on the outlook for the market in 2016 and network with senior investment colleagues.

Registration is complimentary but places are strictly limited so please reserve your place today