Scandinavian Property Development ASA has signed a purchase agreement to acquire the development project Flotmyr in Haugesund. The development project consists of 49,800 m² (excl. parking), mainly shopping and commercial space. About 19,800 m² is residential development. The project is part of the new Haugesund Arena located in the city center of Haugesund. The acquisition price is NOK 210 mln. (approx 25 mln.). The seller is Flotmyr Utbygging AS.
The transaction grants Scandinavian Property Development the rights to develop about 69,100 m² in total, of which 30,000 m² is shopping/commercial space, 19,800 m² is residential space and 19,300 m² is parking space. As part of the agreement SPDE receives an option to acquire adjacent properties currently owned by the municipality of Haugesund (subject to approval by local authorities).
The city of Haugesund is the core retail area for the entire region and the city has the highest retail sales per inhabitant in Norway. Existing shopping centers are located about 5 km from the city centre and there are currently no competing projects under development in the area. The labor market in Haugesund is considered to be strong and the unemployment rate is less than 2%.
Haugesund Arena will be a new multi use arena located in the city centre of Haugesund. This Arena will also accommodate the new soccer stadium for the Haugesund soccer team which is in the Norwegian play off this year.
"Scandinavian Property Development is very satisfied with the purchase of the development project in Haugesund. The project is estimated to have an IRR of more than 20% and the acquisition underlines the ambition of acquiring future-oriented projects in high-growth regions of Scandinavia. Haugesund is a city characterized by high activity within oil, gas, energy and offshore, all very important sectors of Norway. The existing project manager of the project in Haugesund will continue as project manager also after the acquisition. With this and the ongoing development project Hinna Park in Stavanger, Scandinavian Property Development has a lot of local expertise in the region. This makes Scandinavian Property Development a highly competent developer of the project." says Stein Haugbro, Chief Executive Officer of Scandinavian Property Development ASA.
The transaction is expected to be completed by the end of January 2008.