UBS fund acquires Oslo property for EUR 88m

UBS Real Estate has entered into an agreement to acquire the Grev Wedels plass 9 building in Oslo from Norwegian Property for NOK 738 mln (EUR 88.8 mln). The office asset is being contributed to the real estate fund UBS (D) Euroinvest Immobilien.

In a statement, Norwegian Property said the asset will generate a net rent of EUR 5.1 mln, implying a net yield of 5.5%. The property value was EUR 2.8 mln above the valuation carried out at end-June this year. Norwegian Property said the transaction will release approximately EUR 14.4 mln which will be used mainly to pay interest on the company's debt. The transaction will be completed in January 2009.

Norwegian Property said its loan-to-value ratio at end-June is being reduced to 73.9% on a pro forma basis. The payment results in a reduction of the company's floating debt and an increase of the hedging ratio to around 77%. Taken into consideration the effects of the earlier completed rights issue and the sales of Grev Wedels plass, the average interest rate per 30 June would consequently have been 5.41% (down from 5.50% as reported per 30 June).

'The market has always responded positively to our properties. Even if the macro picture changes, good properties are always attractive. The sale of Grev Wedels plass 9 shows exactly this,' said Petter Jansen, CEO of Norwegian Property. ‘As a consequence of the fact that the transaction market in Norway has changed, we have cooperated with financially strong foreign actors who see opportunities in the Norwegian market. This sale shows that we achieve a better price than the current valuation per 30 June. We believe that potential future sales will indicate the same.'