The two Danish real estate investors ATP Ejendomme and PFA Ejendomme have entered into an agreement to acquire TDC's Danish property portfolio of 224 properties at the approximate purchase price of DKK 4.1 billion (ca. €520 mln). TDC will continue as the tenant of the properties.
Both PFA and ATP want to increase their exposure to real estate. PFA and ATP's Danish portfolios consist mainly of office domiciles and large commercial properties with multiple tenants. In order to bring to reality the full development potential of TDC's property portfolio, the two parties will establish a new property fund managed by EjendomsSelskabet Norden A/S. The manager will also own a minority share of the fund and will be in charge of the day-to-day management of the TDC properties and also bring the development possibilities into action.
"We are very pleased with the investment in the TDC portfolio, which is suitable for long-term investors like ATP and PFA. With the involvement of EjendomsSelskabet Norden, we will moreover have the key competences to realize the considerable development potential that we see in the properties and building sites many years ahead," says Michael Nielsen, Director of ATP Ejendomme.
The TDC properties are used for various purposes, however, the main emphasis being on office and technical facilities. Several of the properties are in fact the former staffed telephone exchanges, which are all well-preserved and attractively placed all over Denmark. Two thirds are situated centrally in the five largest urban areas Copenhagen, Aarhus, Aalborg, Odense and the Triangle Region (region covering six municipalities in Jutland). Approximately 30% of the properties are located in and around the capital of Denmark. Altogether, the properties comprise just less than 500,000 m² and come with a total of almost 3 million m² of land.
"The up to 30-year-long lease contracts ensure a stable and competitive return and form a solid basis for all the possibilities that the portfolio includes. Concurrently with the continued introduction of new technology within the telecommunications sector, square meters will be released gradually from their present application for technical purposes. These premises can in the future be used for other purposes and thus increase the return," says Michael Willumsen, Director of PFA Ejendomme.
Other development opportunities are the use of construction rights, more intensive use of building sites in urban areas, and conversion into office and retail premises.
ATP and PFA are both investors in EjendomsSelskabet Norden I K/S, which is headed by the former management of Ejendomsselskabet Norden A/S. In this property company, the Management has accumulated significant experience and expert knowledge within property management and development.
The transaction reflects the institutional investors' tendency towards expanding their indirect investment programmes within real estate. The deciding factor for this model is that it includes a manager with the requisite qualifications for realising and optimising the investment performance.