Wihlborgs acquires Castellum's South Sweden portfolio

Swedish property developer Wihlborgs is set to acquire 95 properties from Castellum in Malmö, Lund, and Helsingborg for SEK 13.3 bn (€1.17 bn).

Wihlborgs

This acquisition, totalling 635,000 m2 of rentable space, aims to expand Wihlborgs' property portfolio in the Öresund region.

The acquired properties are diverse, with 43% office, 41% industrial, 9% retail, and 7% other types of space. They are strategically located in key areas within each city, where Wihlborgs already has established property management.

The deal is pending approval from the Swedish Competition Authority and the Inspectorate of Strategic Products, with a planned completion date of October 1st.

By 2026, these properties are expected to generate an annual rental value of SEK 1.13 bn (€99 mln) and a net operating income of SEK 661 mln (€58 mln), with an 85% occupancy rate. This translates to an initial yield of 5.0%. Wihlborgs has secured financing for the acquisition and plans to reduce its loan-to-value ratio from an initial 59% to around 50% in the long term through various financial strategies.

Ulrika Hallengren, CEO of Wihlborgs Fastigheter, commented: “We have invested more than SEK 20 bn in the Öresund region in the form of new builds and improvements over the past 20 years. While we intend to continue with the above, today’s market presents opportunities to develop existing properties and vacant spaces as part of our long-term growth. Castellum’s South Sweden portfolio is well-managed and well-organised. It also offers many of the qualities and development opportunities – not to mention risk diversification across different property categories – that we value highly.”

Andrew Coombs, CEO of Sirius Real Estate, commented: “The disposals, agreed at a premium to book value, demonstrate Sirius’s continued focus on disciplined capital recycling, crystallising value from smaller, mature assets where we see limited scope for further income or valuation growth and redeploying the proceeds into opportunities with stronger returns potential. “The two self-storage conversion sites in Leicestershire and Bedfordshire are expected to open early in the next financial year.”