Norwegian property company Oslo Areal is to float in the next two months.
The company, which has a NKr3.5bn (¤428m) portfolio, was set up last autumn by Bård Bjølgeruad, corporate finance director at investment bank Enskilda Securities, with NKr1.1bn of equity backing from institutional investors. Around 45% of the company is held by US and UK investors.
ABG Sunndal Colliers is acting as joint lead manager in the run up to the listing, and Swedish agent Newsec is its asset manager. Storebrand chief executive Per Mortensen will become chief executive in May.
The company’s portfolio consists of 17 office buildings in Oslo, with a total floorspace of around 200,000m² and an average lease of 5.5 years.
With the short lease profile, Bjølgerud expects the company to benefit from an upturn in the Norwegian property market.
During the past year, the portfolio’s vacancy level has fallen from 11% to 7-9% and yields have dropped by 100-150 basis points, says Bjølgerud. Further acquisitions are expected to enlarge the portfolio to NKr5bn-NKr6bn.
Bjølgerud said Oslo Areal differs from other Norwegian property companies, such as Steen & Strøm and Olav Thon Gruppen, in that it will not take on development projects and will only focus on Oslo office buildings in central locations.
“Historically, many property companies were boring and had an unclear strategy,” said Bjølgerud. “As a result, the returns and dividends were unattractive and unpredictable.”
Oslo Areal is expected to produce a dividend of 3-5% pa and an internal rate of return of 13-15%. The book building period will start this month or May, and 100% of the company’s shares will be in free float.
References: EGi News 08/04/05
