Kungsleden acquires from—and sells to—Riksbyggen
Press Release 15 May 2006 Listed property company Kungsleden AB (publ) and tenant-owners’ association interest group Riksbyggen are conducting three transactions.
Kungsleden is acquiring 11 retirement homes, totalling 26,000 sq.m., for SEK 290 m. These properties, with a rental value of SEK 26 m, are being acquired at an estimated property yield of 6.75 per cent. All the properties have municipal tenants, and the average remaining contract term is nearly eight years. Kungsleden is scheduled to take possession on 1 July 2006.
Secondly, Riksbyggen is acquiring a portion of the property designated Lund Klostergården 2:6 in the St. Lars quarter of Lund, southern Sweden, for SEK 100 m. This property comprises approximately 30,000 sq.m. of housing development rights. The transaction is conditional on Kungsleden receiving detailed planning on the property. The sales price exceeded cost by SEK 70 m. This transaction will not be accounted before 2007, implying that its effects will not affect profits for calculating dividends for 2006.
Finally, Kungsleden and Riksbyggen have reached an agreement to acquire the property care operation included in the autumn 2005 transaction with Weland Fastigheter and Fogelvik Holding, named Realia Service.
On Kungsleden’s side, the background to the transaction is that Realia Service and its operations are not a strategic business for Kungsleden. Much of Riksbyggen’s operations relate to property management, and at present, Kungsleden is one of Riksbyggen’s major customers and a long-term relationship exists.
Coincident with this transaction, Kungsleden and Riksbyggen signed a property care contract on the properties currently managed by Realia Service.
Commenting on the transaction, Kungsleden’s Chief Executive Jens Engwall said: “We are delighted to be able to do these three deals with Riksbyggen. The acquisition and divestment further consolidate the parties’ positioning in each segment, which eventually, will enhance operational efficiency.”