SWEDEN - A consortium of Swedish pension funds has purchased two ongoing real estate projects from developer Skanksa, which specialise in crime prevention.
The pension funds, belonging two seven companies - Atlas Copco, Apoteksbolaget, Ericsson, Sandvik, Stora Enso, Volvo and Skanska itself - have entered into an agreement with the Swedish developer to buy a detention centre and a police building.
The price paid by the pension funds has not been disclosed, but Skanska's investment in the two properties amounts to SEK1.25bn (€121m) and it is estimated that approximately 65% of the developments will have been completed by the end of 2009.
Construction began on the 23,600 sqms detention centre in Sollentuna, outside Stockholm, started in January 2008 and the building is scheduled for transfer in September 2010.
The entire property is leased to the Swedish Prison and Probation Service on a 25-year contract.
Construction on the police building, which includes 17,000 square metres of houses, offices, garages, workshops and a sports centre, started in September 2008 and is scheduled for completion in June 2010.
The entire property is leased to the Police Authorities in Skane on a 25-year lease.
The combined floor space totals 40,600 sqms, making it one of the largest property transactions in Sweden this year.
"This is a very attractive solution. The properties are a favourable investment, offering us an effective matching of our pension commitments.
It also means that a portion of our assets is hedged against inflation," said Christian Haglund, manager of Atlas Copco's pension fund.
"For us at Skanska's pension fund, there has long been an interest to invest in modern properties with stable tenants and long leases," said Jonas Granholm, manager of Skanska's pension foundations.
"When we put the question to other major Swedish pension funds it was revealed that they shared this interest."
The pension fund consortium was gathered through the initiative of Skanska Financial Services, the developer's specialist unit.
"The transaction clearly demonstrates Skanska's ability to utilise the group's collective expertise in the areas of construction, project development and financing," said Johan Karlstrom, president and chief executive at Skanska.
"I cannot imagine a better example of a win-win situation - the purchasers receive fully leased properties with stable and long-term tenants, public authorities and users gain access to state-of-the-art premises and
Skanska's shareholders take satisfaction from construction and development gains," he added.