Castellum is moving ahead with plans to start construction of a new office building, with E.ON as the major tenant, with an investment of approximately c.€120m (SEK 1.3bn), including land acquisitions. The building permit has now been issued and construction will begin Q2, 2020. The scheme will be a new Nordic head office for E.ON and will serve as the workplace of c.1,500 employees in the Nyhamnen district, located near Malmö’s Central Station.
The planned new building in Nyhamnen comprises approx. 27,000m² leasable area, of which E.ON rents about 24,000m². Construction is scheduled to begin in the second quarter of 2020, and preliminary occupancy is planned for the first quarter of 2023. The leasing agreement between E.ON and Castellum amounts to 12 years and corresponds to an annual rental value of €6.3m (SEK 70m), which will be reported with net rental for 2020. The remaining vacant area of 3,000m². corresponds to an economic vacancy rate of 9% and for these areas there are ongoing negotiations. Castellum intends to finance the investment with existing operating income as well as unutilized credits.
“In these times of concern caused by the Covid-19 virus, it feels gratifying to continue investing in important city-development projects such as E.ON’s new headquarters. This project is Castellum’s largest ever and it will strengthen both our cash flow and balance sheet with a long leasing contract and a solid customer. Along with our equally large upcoming project, the new Swedish National Courts Administration building right across the street, the E.ON headquarters will further consolidate our position as a long-term city developer in central Malmo,” said Henrik Saxborn, CEO at Castellum.