K-Fastigheter acquires cashflow-generating development property in Borås
K-Fast Holding AB has signed an agreement with Västprojekt AB and partners relating to the acquisition of the property Borås Getängen 22 in the municipality of Borås. K-Fastigheter intends to produce a detailed development plan that enables the construction of some 350 apartments in the Group’s proprietary Lateral Low-rise concept buildings.
K-Fast Holding AB (“K-Fastigheter”) has signed an agreement regarding the acquisition of the property Borås Getängen in northwestern Borås. The property currently houses several tenants, including local college Praktiska Gymnasiet, the largest tenant, which has signed a rental agreement until 30 June 2025. K-Fastigheter intends to continue to pursue the detailed development plan initiated by the former owners. The underlying total property value amounts to SEK 47 M and is based on a direct return requirement of 6.5 percent at current rental values. The expected gross floor area (GTA) of the building rights totals approximately 32,000 square meters.
“Borås is expanding quickly and the municipality assesses that demand for housing is acute, with forecast growth of some 1,500 new inhabitants per year. We want to build in growth regions and Borås meets our requirements,” Jacob Karlsson, CEO of K-Fast Holding AB commented. “The sellers have received planning notification for the construction of apartment blocks on the property and we will continue to pursue the detailed development plan with the aim of starting construction in fall 2025 at the earliest. Until that date, our tenant Praktiska Gymnasiet runs college operations at Risängsgatan 6.”
“We would like to thank K-Fastigheter for a quick and smooth transaction and that the company is now completing the project. The sale is in line with Västprojekt’s business model where we develop attractive properties alongside partners,” commented Martin Magnusson at Västprojekt AB. “The sale frees up resources so that we can continue to develop our existing project portfolio and carry out promising new acquisitions. We would like to take the opportunity to thank Swedbank Commercial Property who acted as our advisor on the project.”
The acquisition takes the form of a company acquisition and the underlying property value amounts to approximately SEK 47 million. An additional purchase consideration is payable when the new zoning plan gains legal force, totaling SEK 2,700 per square meter GTA above ground, less the preliminary purchase price paid. The transaction is financed with existing cash, in combination with K-Fastigheter taking over existing bank loans.
As of today’s date, K-Fastigheter paid a preliminary purchase price of some SEK 15.7 million and took possession of all the shares in Fastighetsaktiebolaget Getängen 22 AB, the owner of Borås Getängen 22. Christian Karlsson, Advokatfirman VICI, acted as the buyer’s legal representative and Anders Wennergren at law firm Glimstedt acted as the seller’s legal representative.
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As a property company, K-Fastigheter’s objective is to add value for tenants by creating attractive homes with superior comfort. The Group’s operations encompass active property management, project development and proprietary construction operations. To enhance cost efficiency and cut construction times, K-Fastigheter has chosen to work with three concept buildings, developed in-house and constructed for proprietary management. K-Fastigheter provides some 2,240 homes in several locations in the Öresund region, in the province of Småland and in western Sweden, and is assessing new markets as production capacity increases. The Group’s property portfolio has a book value of approximately SEK 6.9 billion, with an annual rental value of about SEK 265 million. Since November 2019, the company’s class B shares have been traded on Nasdaq Stockholm (ticker: KFAST B). Read more at www.k-fastigheter.com