AP buys Castlelake’s Bostad in Denmark’s biggest deal in 2021

Bostad project at Hobaek Harbour.

In what is said to be the largest commercial real estate transaction in Denmark in 2021, Minneapolis-headquartered alternative investment manager Castlelake has agreed the sale of residential property company BoStad to AP Pension, Denmark’s fourth largest commercial pension provider.

The price agreed is understood to be DKK3 billion (€403 million).

Castlelake became the majority shareholder in Bostad, which owns about 70 assets comprising 1,750 rental units in major cities across Denmark, in April 2019.

Since then the US company has transformed Bostad through “accretive strategic and operational initiatives”, which included installing a new management team, restructuring the company’s finances and selling non-core assets as well as adding new assets to the portfolio.

“When we acquired what is now known as BoStad in 2019, we saw an opportunity to unlock its potential by simplifying its capital structure and optimising its team and portfolio,” said Castlelake managing partner and chief investment officer Evan Carruthers.

AP planning further property expansion

AP Pension has extended an existing collaboration with asset manager BankInvest to cover the management of residential property in order to facilitate the acquisition.

“The acquisition of Bostad and their property portfolio is only the first step in the future collaboration,” said Peter Olsson, CEO of AP Ejendomme, the pension provider’s property arm and one of the country’s leading property developers.

“We have a large pipeline of development projects that we continuously need to be able to sell in the market. The agreement with BankInvest gives us a greater investment capacity and thus the opportunity to keep more of our completed housing projects under our own auspices.”

CBRE acted as sole financial and real estate advisor to Castlelake on the deal. Danish property manager Thylander assisted AP Pension with the transaction, and will collaborate on the management and operation of the Bostad portfolio.