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Hemfosa Fastigheter to acquire 19 assets for 750M Swedish kronor

Hemfosa Fastigheter AB agreed to buy a portfolio of 19 community service properties in Karlskrona, Sweden, for an underlying property value of 750 million Swedish kronor.

The 62,300-square-meter portfolio will be purchased through the acquisition of Galliaden Holding AB from Nordlys AB. The portfolio produces an annual rental income of approximately 71 million kronor, and is let to tenants including the Police Authority, the National Board of Housing, Building and Planning, and the Swedish Coast Guard.

The assets have an average lease of 2.6 years and a leasing rate of 90%. The portfolio includes 17 properties in central Karlskrona, most of which are office assets, a hotel and seven property sites.

Additionally, Hemfosa will assume a bond loan of 473 million kronor with a term extending until April 1, 2018, as part of the acquisition. The bond loan will have a fixed interest rate of 5.75% and a 3.6% interest rate until its refinancing in April 2018 on the back of a compensation provided by the seller.

The deal completion is conditional on an approval of the amendments to the terms and conditions of the bond by 75% of the bondholders, and on the approval by Hemfosa's board of directors on June 13.

The company said transfer of possession is scheduled June 30.

As of June 9, US$1 was equivalent to 8.73 Swedish kronor.