AXA Real Estate Investment Managers announces that the Alternative Property Income Venture ('APIV') has completed the sale of four assets located in southern Sweden, totaling 26,617 m² of gross lettable area (‘GLA’), for a combined consideration of €65.8 million to Nordika Fastigheter AB (‘Nordika’).
The assets comprise a hotel building and a concert hall, both located in Växjö, which have been acquired by Nordika, and two police stations, located in Västervik and Kalmar, which, upon completion of the acquisition, Nordika immediately sold on to Vacse AB (’Vacse’) in a back-to-back transaction.
The assets are currently fully let and circa 90% of the income is derived from governmental and municipal tenants. The average remaining lease term of the disposed portfolio is over 13 years. AXA Real Estate acquired the assets in 2010 and has opportunistically sold them to crystallize profits which will deliver a net equity multiplier of over 1.5x on this transaction to APIV investors.
Vacse, a club structure owned by seven Swedish corporate pension funds including Volvo, Skanska and LM Ericsson has in a back-to-back transaction acquired the two Police stations. The two assets located in Västervik and Kalmar, which were built in 2006 and 2008 respectively and serve as local headquarters to the Swedish Police and The Swedish Prosecution Authority.
Henrik Bastman, Head of Asset Management in the Nordic Region at AXA Real Estate, commented: “There is a clear demand amongst investors in Sweden for well-located assets let to tenants with strong covenants and long leases, which this portfolio clearly delivers. Within this demand, there is also a clear preference from investors for assets let to core public services tenants, which has been reflected in the market pricing and the yield compression experienced for these types of assets over the past few years.”
Dan Bowden, Senior Fund Manager of APIV and Head of Alternatives, added: “The sale of the portfolio not only demonstrates the increasing demand from investors for assets in alternative real estate classes, but also our track record of identifying robust investment opportunities even within these uncertain market conditions. With government bond yields at historic lows, the secure and long term income of these assets have become particularly attractive for investors with liability matching requirements.
This opportunistic sale has crystallized a significant return for APIV’s investors with the returns generated through prudent and timely investment management and without taking any material letting, covenant, redevelopment or repositioning risks. Following the disposal, APIV remains a robustly positioned portfolio which is fully occupied with a weighted average lease term in excess of 13 years, and only 0.2% lease expiries scheduled within the life of the fund.”
Leimdörfer has served as sole financial adviser to AXA Real Estate.
Source: FTI Consulting