Acta Holding ASA - Real estate divestment in Sweden and Norway
Acta has syndicated a significant number of real estate projects in Norway and Sweden since 1999. In the second half of 2005 the company completed the first projects in Germany and has since invested significant amounts in German residential apartments. Further diversification in relation to asset sourcing within real estate syndication has been obtained during 2006 as Acta has completed projects in the Baltics and in the US.
The Nordic real estate markets have experienced outstanding returns the last couple of years and yields have come down from a significantly higher level than when Acta made its first investments in the Swedish commercial real estate market in 2003. On this background, the board of directors of the Acta managed real estate companies Næringsbygg Holding I (Commercial buildings - portfolio I) and Næringsbygg Holding II (Commercial buildings - portfolio II) have - based on a thorough evaluation of different alternatives - decided that it would be in the clients` best interest to approve a sale of properties at a total transaction value of approximately 5 billion Norwegian kroner. This approval will lock in client equity returns of more than 40 % in less than two years.
The buyer of the properties in Sweden is Niam III, one of North Europe`s largest private equity real estate funds with an investment capacity of 15 billion kroner. The fund`s real estate portfolio is concentrated in Sweden, Finland and the Baltics. The buyer of Aker Hus, which is the property where Aker ASA will build its new headquarter in Norway, is the newly established Norwegian real estate company Norwegian Property ASA, which will be listed on the Oslo Stock Exchange in the fourth quarter this year.
Acta is entitled to a success fee of 15 % of returns above client mandate returns when an entire syndicated real estate portfolio is divested. The sale of these properties implies that the portfolio Næringsbygg Holding II will be emptied and closed. The portfolio mandate in this portfolio offers clients 11 % internal rate of return on their equity net of all costs. Acta will be entitled to a success fee of up to 30 million Norwegian kroner in this transaction. Assets under management and thereby annual management fees will be negatively affected as a result of the divestment. Næringsbygg Holding I has not been fully divested and no success fees will be charged by Acta at this point in time from this portfolio.
`We are very happy to offer our clients returns well above mandates in an exceptionally strong Nordic real estate market. The divestment will however reduce Acta`s management fees in the coming quarters but we hope that clients are satisfied with their returns and will join us in new real estate markets`, says Simen Mørdre.
Stavanger, October 16 2006
CEO, Acta Holding ASA
+47 90 86 85 62