NCC has sold three properties and a site leasehold, totaling 330 rental apartments in the municipalities of Stockholm, Sundbyberg and Järfälla, to KPA Pension for SEK 667 million (approx. €77 million). The divestment is part of NCC’s long-term focus on developing and building rental apartments.
“It is gratifying that we can now provide Greater Stockholm with new rental apartments in partnership with such a strong, long-term owner as KPA Pension. NCC has developed several platforms, including rental apartments, in an effort to produce rental apartments on a proprietary basis, and we are now utilizing land from our portfolio of proprietary development rights intended for tenant-owner apartments to carry out this project,” says Joachim Hallengren, Business Area Manager, NCC Housing.
The transaction will take the form of a company transaction, on a forward funding basis. This is a form of financing whereby the purchase consideration is paid on an ongoing basis from the first date of access until the entire project is completed.
The properties, situated in Aspudden (Stockholm), Ursvik (Sundbyberg) and Barkarby (Järfälla), comprise a total of 330 apartments. The apartments in Barkarby are completed and occupied. The project in Aspudden is scheduled to commence in the third quarter of 2013. NCC plans to initiate two projects in Ursvik; one during the third quarter of 2013 and the other in 2014 when building permits have been obtained for the projects.
“The divestment is confirmation that our rental apartment business is now established in the Swedish property market. We would gladly build more, provided, for example, that we can secure land allocations for the development of more rental units,” says Peter Wågström, President and CEO of NCC.
The properties will be delivered with environmental certification at Sweden Green Building Council Silver. The purchaser will gain access to the apartments in Barkarby and Aspudden on October 1 and to those in Ursvik during the fourth quarter.
The divestment will have a marginal impact on earnings and will be recognized among sales of the NCC Housing business area in the third quarter of 2013.