REAL ESTATE - Swedish bank SEB is to sell off its Baltic real estate portfolio – probably to a pension fund – as part of its bid to get out of property.
Anders Arozin, deputy head of SEB’s Eastern European banking operations, said he expected interest in the portfolio to come from "traditional European institutional investors", notably pension funds. The portfolio has a book value of €104m.
The holding currently for sale comprises a 47-property sale-and-leaseback portfolio and a 16-property prime commercial portfolio. SEB expects the sale to be completed by the end of the first quarter next year.
The decision to sell came after what the bank described as an upsurge in international interest in real estate in the region. Driving demand is the likely impact of strong macroeconomic growth on the rental market combined with pressure on a limited supply of office space. "A couple of years ago, we couldn’t have done it," said Arozin.
The sale will mark the effective disposal of real estate assets SEB acquired at the end of the 1990s with corporate acquisitions in Estonia, Latvia and Lithuania.
Although the bank still owns real estate in Ukraine, Arozin said the remaining portfolio was "not substantial".