Madison International Realty announces that it is in the final stages of acquiring and consolidating 38,000 square metres of assets in Bjørvika, the new urban infill development in the centre of Oslo and the country’s largest urban project.
The Bjørvika development is composed of six distinctive development stages – Sørenga, Sørengkaia, Munch Brygge, Barcode, Bispevika North and Bispevika South. To bring the assets together under one management platform, Madison has acquired Sørenga, Sørengkaia and the associated parking facilities at Sørenga, as well as entered into an unconditional SPA to acquire Munch Brygge. Furthermore, Oslo S Utvikling (OSU) has accepted a bid from Madison for the ground-level commercial assets in Barcode and the northern part of Bispevika. OSU will continue the development of Bispevika South which is not included in the transaction. With these transactions, Madison has secured ownership and control of the majority of the ground floor properties in Bjørvika.
Bjørvika, which is uniquely located in immediate proximity to Norway’s largest public transportation hub and the Oslo fjord, has already established itself as a new CBD in Oslo. It will also become Oslo’s new cultural district with several of Norway’s most prominent cultural institutions such as the Norwegian National Opera & Ballet, the new Munch Museum and the new Deichmanske Public Library.
An integral part of the strategy is to create a vibrant, open and inclusive ‘urban floor’ with a focus on the growing F&B segment. The ‘urban floor’ assets are at ground level and will include retail, F&B, leisure and other services and amenities for Bjørvika, while separately-owned and -managed offices and residential units will be located on higher levels. When fully developed, the total area will host approximately 12,000 residences and more than 20,000 employees.
Rolf Thorsen, CEO of Oslo S Utvikling: “Our vision is to develop Bjørvika into Norway’s most attractive area, and we are pleased to sell the urban floor to a buyer who will bring this vision to life. OSU continues to develop residential units and offices in Bjørvika, as well as commercial assets located at other land plots that we control in Bjørvika. Until the execution of the share purchase agreement, we will continue the leasing process in Barcode and Bispevika North.”
Carucel Eiendom (“Carucel”), owned by Carl Erik Krefting and his family, will oversee the asset management of the assembled properties. The investment represents Madison’s third acquisition in Norway, all facilitated by the Norwegian investment bank Arctic Securities.
The new company, Oslo Bay District, has through the acquisitions of Sørenga, Sørengkaia and the associated parking facilities at Sørenga and the planned acquisition of Munch Brygge, secured control of 11,000 square metres of gross lettable area and 270 parking spaces in Bjørvika. The Barcode and Bispevika North portfolios will add an additional 27,000 square metres of gross lettable area to the portfolio, leading to a total lettable area of 38,000 square metres. The development of Sørenga, Sørengkaia and Barcode was completed over a period from 2016 to 2018, Munch Brygge will be completed in Q1 2019, while Bispevika North will be completed in four stages from Q1 2019 to Q4 2020. Acquisitions of assets under development (Munch Brygge and Bispevika North) will be structured as forward transactions.
Out of the total lettable area, 25,000 square metres are either occupied or pre-let. The latest addition includes Maaemo, Norway’s first and only three star Michelin restaurant, which according to lease agreement with OSU will take up 1,600 square metres in Bispevika North.
The Carucel team, headed by CEO Carl Erik Krefting, previously a partner with Madison in Promenaden, has extensive experience in managing ground floor commercial properties such as the establishment of EGER, Promenaden and the development of the Steen & Strøm department store. The Carucel team has, in collaboration with Madison, already started the leasing process for the remaining ground floor areas in Sørenga, Sørengkaia and Munch Brygge, and intends to complete and continue the leasing process for the Barcode and Bispevika North portfolios respectively, in collaboration with the seller upon execution of the share purchase agreement.
Derek Jacobson, Co-Chief Investment Officer at Madison International Realty, commented: “We have worked closely with Arctic Securities since 2012 in connection with our previous transactions in Norway. We are very pleased that they earlier this fall presented us with the business idea of securing ownership of the urban floor in Bjørvika, which we believe will be value enhancing for the area’s future development. The area has all the prerequisites for becoming Norway’s most attractive urban district. A successful implementation of the urban floor, through securing ownership of the properties in their entirety, is critical to optimize the area’s full potential. The developers, with OSU as the developer of Barcode, Bispevika North and Bispevika South in the forefront, have done a great job setting the scene for the urban floor, and together with Carucel, our desire is to fill the scene with vibrant tenants.”
Carl Erik Krefting, CEO of Carucel Eiendom, added: “International trends shows that consumers prefer to spend money on experiences rather than consumer products, and we would like Bjørvika to be a place where visitors, local residents and employees can enjoy a wide range of dining, shopping, cultural and outdoor experiences at the doorstep of the Oslo fjord.”
Arctic Securities has acted as Madison’s advisor in the structuring, facilitating and financing of the various acquisitions comprising the totality of the Bjørvika ground floor included in the new company Oslo Bay District.
Akershus Eiendom has acted as OSU’s advisor, and as Stor Oslo’s advisor with regards to the sale of the ground floor properties at Munch Brygge.