Norwegian Property ASA will acquire Drammensveien 134 (building 2 - 5), Drammensveien 134 (building 6 - the parking area) and Drammensveien 149 ("the Esso building"). The properties have a total area of approximately 44.000 m². The acquisition price is approximately €115 million (approx. 1 billion NOK). Yearly gross rent is currently approximately €7 million (59.9 million NOK). The average duration of the lease contracts is 4.9 years. The acquisition price implies a net yield after tax of 5.5%.
Norwegian Property judges the current rent level to be below market rent in the Skøyen area, implying an upside potential when contracts are re-negotiated. The properties have a potential for further development, including a pre-emptive right for the acquisition of the neighbouring property to Drammensveien 149 (the Esso gasoline station).
In addition to these transactions Norwegian Property ASA will, in a separate transaction, acquire Høegh Invest Eiendom's remaining 25% stake in Drammensveien 134 KS (ownership of Drammensveien 134 - building 1, and the office section of building number 6). Norwegian Property's share of Drammensveien 134 thus increases to 100%. Norwegian Property ASA has now acquired all properties from the portfolio of Høegh Eiendom Invest in the Skøyen area.
After this transaction Norwegian Property ASA holds a total of 106.000 m² of office property in the Skøyen area, generating a gross rent in the coming four quarters of approximately €20 million (about 174 million NOK).
After closing of this transaction, and including the expected closing of two contracts currently signed as letters of intent, Norwegian Property ASA will have a portfolio of 40 properties, with a total area of about 505.000 m². The average duration of the lease contracts in the portfolio is 7.8 years, with a vacancy of less than 1%. The total acquisition price will have been approximately €1,5 billion (approx. 12.7 billion NOK). Gross rent the coming four quarters will be approximately €88 million (770 million NOK). The properties are - on average - acquired at an implicit net yield after tax of about 6%.
Source: Norwegian Property