Swedish listed property company Kungsleden AB (publ) has signed a collaboration agreement with Residenz Gruppe of Germany regarding the construction of eight retirement home properties in Germany. The first building will be completed in December this year, and the remainder progressively through 2008.

The total investment will amount to approximately SEK 490 m (EUR 51.5 m), with an estimated property yield of 7.0%. The lettable floor-space of these properties will amount to about 29,000 sq.m. with accommodation for 576 residents.

Since 1988, Residenz Gruppe has started, operated and developed retirement homes in Germany, and currently operates 14 retirement homes with accommodation for around 1,200 residents. Residenz Gruppe signs 20-year rental agreements with a rental value of nearly SEK 35 m yearly (EUR 3.6 m).

“We will further consolidate our presence on the German market through these retirement homes, which to some extent are in regions where Kungsleden is already present. We see good opportunities for continued growth in Germany,” commented Kungsleden’s Chief Executive Thomas Erséus.

Kungsleden’s objective is to have accumulated a retirement homes holding in Germany worth some SEK 5 bn by year-end 2008.