Aberdeen Property Investors and the investment bank SEB Enskilda announce the establishment of a major property development company in the Scandinavian market, Scandinavian Property Development ASA. The company will be open for investment from both domestic and international institutional investors.
The company has made its first investment in the principal development projects in housing and commercial property at Fornebu, the former Oslo airport, for around €600 million. The contract covers over 500,000 m². of building rights and involves six companies that are currently developing housing and commercial property in the area. Closing of the transaction is expected before the end of February.
Espen Klevmark, Managing Director of Aberdeen Property Investors in Norway and the group's Head of product development comments: "Through the founding of Scandinavian Property Development, we are creating a major new property development company. From day one, Scandinavian Property Development will have both a very attractive portfolio of property projects and substantial competence in property development."
The strategy of Scandinavian Property Development, which will be administered and managed by Aberdeen Property Investors, is to take an active and leading developer role in Scandinavia in the areas of both housing and commercial properties. The company aims to establish a portfolio with a value of more than €1.5 billion during 2007. Thereby the company will achieve a size and ownership structure that will make the company's shares attractive and liquid. A decision will be made on stock exchange flotation in the course of 2007. Meanwhile, the company will be listed in the OTC market as soon as it is practically possible. Dedicated key personnel with highly respected development and financial skills are already in place, and the company is currently looking at specific acquisitions in Sweden for the first quarter of 2007, to a value of €450 million, to complement the Oslo acquisition. The return target for the investment company will be 20+% after tax and fees, based on a balance of major non-yielding development projects and yielding opportunistic property portfolios.
Ubbe Strihagen, International Director at Aberdeen Property Investors added: "Scandinavian Property Development will complement Aberdeen's other products in the Nordic region. We are very pleased to present this product in response to recent requests from Norwegian and international property investors for a large, liquid and focused property development company."
Source: Aberdeen Property Investors
