News

Madison and Søylen form jv for prime Oslo retail

News

Estates Gazette

31 October 2013

Retail

Madison will acquire 30% of the equity in the new company for NOK310m, with Søylen holding the rest. This brings the total amount of equity held by the new company to circa NOK1bn. Søylen Eiendom and related companies previously held 100% of the assets.

The new company’s portfolio includes shopping centre EGER Karl Johan as well as Posthallen, a well-known place for wine and food. Søylen’s 50% share of Steen & Strøm, which covers a total of 92,000 m², will also be part of the portfolio. Since the establishment of EGER in 2009, Søylen has concentrated on building up retail properties with prestigious brands. Their current tenants include Gucci, Hamleys, Bottega Veneta, Hermes and Marc by Marc Jacobs.

Turnover for the retail outlets in EGER Karl Johan and Steen & Strøm in 2013 is expected to reach NOK1.2bn.

Commenting on the transaction, Carl Erik Krefting, chairman of Søylen Eiendom and the newly established company, said: “We have acquired a very competent and solid partner as a shareholder in the new company.

“Madison was enthusiastic about our business concept and has appreciated the quality of our property portfolio. Nine properties are involved, with prime locations on and around Egertorget square, and several of them accommodate prestige shops. This is a portfolio with interesting prospects.”

Derek Jacobson, managing director for European investment at Madison International Reality, added: “We consider quality, location and management when investing in new ventures, and the new company has, in our view, brought together prestigious properties with a promising potential.

“The macroeconomic outlook in Norway is unmatched in Europe and retail is experiencing increased demand, particularly in the luxury segment. As such, we are pleased to partner with Søylen in this new venture, since they have been visionary in developing a shopping area in Oslo which meets growing demand in the high-end market.”

This transaction represents Madison’s second investment in the Norwegian property market in line with their strategy of buying into existing high class properties. Madison initially acquired a 35% holding in Statoil’s newly built regional office at Fornebu outside Oslo at the end of 2012.

Søylen Eiendom will use part of the proceeds from the transaction to repay the seller credit related to the purchase of Steen & Strøm. The transaction will not only strengthen Søylen Eiendom’s capital adequacy and liquidity, but also provide renewed strength to continue developing its commitment to luxury shops in central Oslo.

Søylen Eiendom has been assisted in the transaction by Arctic Securities. Madison was advised by Malling & Co in assessing the market.

Madison International Realty and Søylen Eiendom have formed a joint venture company which will own nine properties in Oslo’s premier shopping district. The assets, valued at NOK3bn (€370.4m), are on and around Karl Johan, Oslo’s main street. Madison will acquire 30% of the equity in the new company for NOK310m, with Søylen holding the rest. This brings the total amount of equity held by the new company to circa NOK1bn. Søylen Eiendom and related companies previously held 100% of the assets. The new company’s portfolio includes shopping centre EGER Karl Johan as well as Posthallen, a well-known place for wine and food. Søylen’s 50% share of Steen & Strøm, which covers a total of 92,000 m², will also be part of the portfolio. Since the establishment of EGER in 2009, Søylen has concentrated on building up retail properties with prestigious brands. Their current tenants include Gucci, Hamleys, Bottega Veneta, Hermes and Marc by Marc Jacobs. Turnover for the retail outlets in EGER Karl Johan and Steen & Strøm in 2013 is expected to reach NOK1.2bn. Commenting on the transaction, Carl Erik Krefting, chairman of Søylen Eiendom and the newly established company, said: “We have acquired a very competent and solid partner as a shareholder in the new company. “Madison was enthusiastic about our business concept and has appreciated the quality of our property portfolio. Nine properties are involved, with prime locations on and around Egertorget square, and several of them accommodate prestige shops. This is a portfolio with interesting prospects.” Derek Jacobson, managing director for European investment at Madison International Reality, added: “We consider quality, location and management when investing in new ventures, and the new company has, in our view, brought together prestigious properties with a promising potential. “The macroeconomic outlook in Norway is unmatched in Europe and retail is experiencing increased demand, particularly in the luxury segment. As such, we are pleased to partner with Søylen in this new venture, since they have been visionary in developing a shopping area in Oslo which meets growing demand in the high-end market.” This transaction represents Madison’s second investment in the Norwegian property market in line with their strategy of buying into existing high class properties. Madison initially acquired a 35% holding in Statoil’s newly built regional office at Fornebu outside Oslo at the end of 2012. Søylen Eiendom will use part of the proceeds from the transaction to repay the seller credit related to the purchase of Steen & Strøm. The transaction will not only strengthen Søylen Eiendom’s capital adequacy and liquidity, but also provide renewed strength to continue developing its commitment to luxury shops in central Oslo. Søylen Eiendom has been assisted in the transaction by Arctic Securities. Madison was advised by Malling & Co in assessing the market.