Swedish property developer Balder and Nordic construction company Peab have agreed to acquire a substantial property portfolio from Centur, a joint venture (JV) company.
The deals, valued at approximately Skr7.3bn ($679.2m), will see Balder taking over investment properties and Peab assuming control of project development properties.
Peab has completed the purchase of investment and development properties in Malmö, Sweden, amounting to Skr2.07bn. Concurrently, Centur has sold investment properties to Balder for a total of Skr5.228bn.
The transactions are poised to have a considerable impact on the companies involved.
Specifically, Peab's operating profit is expected to see a positive effect of approximately Skr400m in the fourth quarter (Q4) of 2024.
The company has acquired four investment properties in Varvstaden, generating a net operating income of Skr43m for Skr783m. The acquisition also includes approximately 280,000m² of planned development rights for Skr1.228bn.
Peab will also take over an ongoing development project, Hall 259, which features 11,000m² of leasable area and 550 parking spaces, set for completion in 2027.
Peab Project Development business area manager Göran Linder said: “Peab and Balder have successfully developed Centur and it feels natural that the owners are now acquiring assets that can be further refined within each company group.
"We are freeing up capital by divesting completed properties in the joint venture company Centur which has generated a good return over the years and developed well in value, which has led to the divestments generating a profit.”
Additionally, Peab is set to acquire an investment property in the Kirseberg-Östervärn area of Malmö for Skr68m, with a zoning plan process in progress to enable the development of roughly 55,000m² of building rights for residential and office space.
The financial implications of the transactions include an increase in Peab's net debt by around Skr2bn in Q4 2024, with a forecasted decrease of Skr1bn in Q1 2025 following a dividend from Centur.
Overall, Peab's net debt is set to rise by approximately Skr1bn over the coming years. The company will divest partially owned, completed properties in the management phase to invest in development rights for future projects, as well as a number of completed properties in Varvsstaden.
The properties currently generate an annualised net operating income of approximately Skr365m.
Following the transaction, Balder's net debt is expected to be marginally reduced, factoring in the recent share issue and anticipated dividends from Centur during the first half of 2025.
