Heimstaden Bostad pays €9.1bn for European residental portfolio

Heimstaden Bostad pays €9.1bn for European residental portfolio
Image: Heimstaden Bostad

Heimstaden Bostad has acquired a residential portfolio comprising 28,776 homes across Sweden, Germany, and Denmark from Akelius for SEK 92.5 billion (€9.1 billion).

The portfolio comprises 599 properties with 28,776 homes centrally located in Berlin (14,050), Hamburg (3,592), Stockholm (5,934), Malmö (4,107), and Copenhagen (1,093).

”For 27 years, Akelius has gradually built up the portfolio with continuous development and quality renovations, which positively complements Heimstaden Bostad’s long-term, value-focused perspective. The portfolio has a residential occupancy of appr. 98% and more than 99% of rental income comes from regulated apartments,” said the company in a press release.

“We are happy to announce this acquisition across five thriving and attractive European cities with rich cultural legacies, strong economic growth, and passionate inhabitants with engagement for their cities and broader society,” said CEO Patrik Hall.

”Scale leads to improvements throughout our value chain, and enables more efficient operations, better customer experience, and greater impact through investments in sustainable solutions and measures aimed at combating society challenges and climate change. Over the last few years, Heimstaden Bostad has successfully integrated properties and organisations in new and existing markets, with large acquisitions in Denmark, the Netherlands, the Czech Republic, and Germany,” Patrik Hall added.

The transaction value is SEK 92.5 billion (EUR 9.1 billion) with SEK 2.8 billion(€270million) in annual rental income.

The transaction will be financed with cash at hand, SEK 24.8 billion in new equity and a SEK 65.7 billion bridge financing facility with a 2-year maturity, said the company in the press release.

Equity is committed from existing shareholders Heimstaden AB (SEK 8.5 billion), KPA Pension (part of Folksam Group) (SEK 8 billion), Alecta (SEK 7.1 billion), and the Swedish Pensions Agency (SEK 1.25 billion).

“We are growing our presence in markets where we have strong knowledge and experience, markets that share key attributes, such as supply/demand imbalance, favourable demographical trends, and growing economies. We are particularly pleased to grow and expand geographically in Germany, the largest and most mature residential market in Europe, and establishing a presence in Hamburg,” said Christian Fladeland, Co-Chief Investment Officer at Heimstaden.