Kungsleden: SEK 913 m public property acquisition

Swedish listed property company Kungsleden AB (publ) is acquiring 43 properties from the Municipality of Harnosand in northern Sweden. Kungsleden is acquiring basically all the properties were the Municipality conducts its activities such as retirement homes, pre-schools and schools.

Total floor-space is 154,000 sq.m. and total rental value is SEK 114 m, 80% of which is sourced from the Municipality of Harnosand. The average term of those contracts where the Municipality is signatory is approximately 17 years, and for the portfolio overall, about 14 years.

The acquisition price of the properties is SEK 913 m including transaction costs, implying an acquisition cost of just over SEK 5,900 per sq.m.

The transaction is conditional on the approval of the Municipal council. Kungsleden is scheduled to take possession on 1 December 2007.

“We’re thankful that the Municipality of Harnosand has entrusted us to take on ownership of basically all the properties where it operates,” commented Kungsleden’s Chief Executive Thomas Erséus, “it demonstrates that our public properties initiative in recent years has provided municipalities with an alternative to direct ownership.”