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Heimstaden’s €1.6bn resi deal largest ever in Denmark

Christian Fladeland, co-CIO of Heimstaden

Heimstaden, the Swedish real estate owner and developer, has agreed to buy a residential portfolio from Niam for SEK16.6 billion (€1.63 billion) in what is the largest ever real estate transaction in Denmark.

The portfolio includes 152 residential properties comprising 6,237 units, mainly terraced  houses located across Denmark in large and mid-sized cities like Odense, Vejle, Horsens, Silkeborg and Randers.

A third of the portfolio was built in the last three years and 357 units are still under construction and will be delivered over the next 12 months. Gross annual rental income for the portfolio is SEK824 million. The transaction includes nine plots of land with residential planning consent in place for the construction of 73,600 sq m.

The portfolio also includes 35 commercial properties, which are made up of logistics, storage and light industrial real estate, all located near the residential units, which Heimstaden plans to divest over the next few years to focus on the residential side.

“The Danish housing market remains healthy, supported by favourable long-term economic outlook and strong demographic trends,” said Christian Fladeland, co-chief investment officer, Heimstaden (pictured above).”The acquisition of an attractive portfolio with a strong operational platform will significantly broaden our geographical footprint and operational reach.”

Prior to the acquisition, Heimstaden already had a portfolio of 10,000 residential units in Denmark, concentrated around the capital and larger cities. As a result of the record-breaking transaction, Denmark will become the Swedish group’s largest market in terms of value.

“After several years of building a large portfolio at high pace in conjunction with active asset management, we are pleased to hand over the company to a strong and professional residential owner like Heimstaden,” said Michael Berthelsen, Denmark country manager, Niam.

The transaction is expected to close in early 2021, subject to antitrust clearance, and will be financed through a mix of available cash and debt, primarily from Danish mortgage institutions.