Barings Completes $85M Swedish Office Deal
- Sep 03, 2020
Confident of the office sector in a post-COVID-19 market, Barings has acquired an office building in Stockholm’s central business district. The company purchased the office on behalf of institutional investors for €72 million ($85.3 million) from BLDG Holding AB in an off-market transaction.
The 6,185-square-meter (66,574-square-foot) building, Skvalberget 33, is fully leased to four tenants including Academic Work, Meltwater, Stratsys and Beckmans Design School with an average of 2.6 years remaining on the leases. According to Barings, Beckmans will be vacating the three floors it occupies and ending its lease in 2.5 years.
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Skvalberget 33 is a two-minute walk from the Östermalmstorg subway station that connects to Stockholm Central Station. The office property is also next to Sturegallerian, a retail destination that’s undergoing a major renovation into a mixed-use development that will include offices, residential, retail and hotels.
With Beckmans set to end its lease in a couple years, Barings is looking to upgrade the space once it becomes vacant. The new owner is also planning to renovate the lobby and common areas, including the changing rooms and bicycle storage. Barings also identified an opportunity to develop more usable space in the building with the possibility of building an additional 3,500 square meters (37,673 square feet) in the courtyard and converting the attic space into an additional 400 square meters (4,305 square feet) of office space and an outdoor roof terrace.
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Gunther Deutsch, managing director & head of real estate transactions in Europe at Barings, said in prepared remarks that the company believes in the necessity of offices despite the recent trend of working from home due to the lockdowns caused by COVID-19.
Deutsch added that in a post-COVID-19 market, there will be an increased demand for new or refurbished offices in central business district locations that offer workspace flexibility and strong technology and sustainability standards.
Thorsten Slytå, managing director & head of Scandinavia at Barings, also pointed at the strong demand for office space in Stockholm as none of Skvalberget 33’s tenants requested rent reductions.
Besides office properties, Barings also recently acquired a 1.3 million-square-foot portfolio of four logistics assets in Norrköping, Sweden. The company paid $104 million for the asset in a sale-leaseback deal with a logistics company owned by the Swedish and Danish governments.