German group Allianz Real Estate and Sweden’s Heimstaden Bostad have announced a new joint venture giving Allianz exposure to a 99-asset, Swedish residential portfolio.
The portfolio, acquired by Heimstaden Bostad from Akelius, has a gross asset value of €3 bn and comprises assets in two of Sweden’s three biggest cities, Stockholm and Malmö.
Allianz is investing SEK 7.9 bn (€770 mln) of equity to buy a 56.25% capital share and a 49.85% voting share in the assets on behalf of Allianz companies. Heimstaden Bostad is providing a debt facility to finance the deal, which will be completed in January 2022.
The 99 properties include 3,377 homes in Malmö and 5,932 in Stockholm, making the JV one of the largest private residential owners in the Swedish capital. All residential properties have regulated rent with an economic occupancy rate of 99% and provide stable cash flows and attractive yields on a risk adjusted basis.
This joint venture, comprising 9,300 units in total, significantly increases Allianz Real Estate’s footprint in the residential sector in Europe which amounted to €3.7 bn of assets under management at end September 2021.
Around €120 mln will be further invested into the portfolio to bring it in line with the CRREM decarbonization pathway. Allianz Real Estate has set twin targets of reducing the carbon footprint of its global portfolio by 25% by 2025, and to be fully carbon net-zero by 2050.
Annette Kröger, CEO North & Central Europe for Allianz Real Estate, said: ‘We are very pleased to enter into this joint venture covering such a well-diversified, sizeable portfolio. Our renewed interest in the residential sector is a deliberate adjustment to our investment strategy; the sector’s stability makes the sector highly attractive to long-term investors. The fundamentals in the Nordics are strong, the residential market is well-established and we have actively targeted growth in this region.’
Patrik Hall, CEO Heimstaden, said: ‘We are pleased to partner with Allianz, which is a global and reputable long-term investor with significant experience within the real estate sector. Their substantial investment and long-term commitment show trust and confidence in our platform and operational expertise, and we look forward to building a strong and lasting partnership.’
Heimstaden Bostad was advised by PwC and DLA Piper. Allianz Real Estate was also advised by PwC, as well as by CMS, Vinge and Deloitte.