Keops has entered into conditional agreement with Essex Invest Sverige AB about the sale of 68 Swedish residential properties at a total price of approximately €286 million (SEK 2,850 million).
Thereby, Keops realises a total increase in value of approx. €61 million (DKK 0.5 billion) through the past two years. The agreement on sale concerns a pool of three Swedish property companies:
- Parts of the Malmstaden portfolio (residences in Norrköping)
- The Borgs portfolio (residences in Norrköping)
- The PBA portfolio (residences in Malmö, Kalmar and Karlskrona)
A total of 68 well-maintained rental properties with 4,489 flats and around 346,000 m², primarily applied as residences. Only about 52,087 m² are let out for other purposes (e.g. shops and institutions on ground floor).
The agreement is conditional on the buyer's provision of financing until 10 December 2006, after which the property companies are transferred 1 February 2007.
Large increase in value
The portfolio being sold was acquired from May 2004 until January 2006 at a total price of approx. €220 million (SEK 2,186 million) incl. costs. Since the first properties (the PBA portfolio) were acquired by Keops in May 2004, the development in prices on Swedish residential properties has been extremely favourable. The latest recognition of the portfolio was at a total of approx. €263 million (SEK 2,622 million) at 30 June 2006.
Accordingly, the sale means that Keops is able to realise the recognised revaluation as well as further approx. €32 million (SEK 319 million) after tax and costs. This includes approx. €16 million (SEK 164 million) in the form of reversed deferred tax.
Increased focus on commercial properties
After the sale, Keops Group almost only possesses investment properties applied for commercial purposes, i.e. shops, offices, storage and production. A total of 409 properties at a carrying amount of approx. €2.2 billion (DKK 18.2 billion).
Acquisition of investment properties at the same time
Conditioned on the completion of the sale described above, and with takeover set for 31 December 2006, Keops will acquire 14 Danish commercial properties from Essex Invest at a total price of approx. €49 million (DKK 400 million) corresponding to an average net return of 5.2%.
The properties are primarily production properties and are let out to Louis Poulsen under lease agreements which are interminable for 10 years on average. The purpose of the acquisition is mediation to high-salaried and/or wealthy investors.
Early redemption of bonds
If the sale of the property companies is completed, Keops EjendomsObligationer III (PBA) A/S will announce early redemption of the bonds at the end of December 2006 for redemption by the end of January 2007. The bonds in question are:
- 8,5% Keops EjendomsObligationer III 2011
- 9% Keops EjendomsObligationer III 2014