JM will own 20 percent of the newly formed company. In conjunction with the establishment of the company, JM is transferring rental unit properties with a market value of SEK 1,060 million, which entails a market gain of SEK 170 million and a positive cash flow of SEK 980 million that will be reported in Q4 2020 within the business segment JM Property Development.
The reason for establishing the structure is to enable greater investment in rental housing by contributing capital to the long-term ownership while at the same time keeping this part of JM’s housing business capital-efficient. JM thereby can allocate more capital to the development of rental housing as new investment and development possibilities arise.
In conjunction with the transfer of property and the establishment of the new company, JM is realizing gains of SEK 170 million and a cash flow of SEK 980 million. JM’s investment in the new company amounts to approximately SEK 80 million. The transaction will be reported within the JM Property Development business segment in Q4 2020. The company will have an appropriate capital structure with equity and borrowed capital.
JM is responsible for the operations of the company and the properties, as well as the development of new properties that will be placed in the new company in the future. The company’s first investment consists of 418 rental units, which consist of the following assets:
Leasehold rights to the properties Stockholm Träsliperiet 6 and Stockholm Stämplaren 5 in Stureby, Stockholm, totaling 187 rental units
Leasehold rights to the properties Stockholm Gröna Rutan 3 and Stockholm Gustafs Skål 1 in Bredäng, Stockholm, totaling 138 rental units
Leasehold rights to the property Sicklaön 40:21 in Sickla, Nacka, totaling 93 rental units.
“We are very pleased that we have successfully created together with the Swedish Foundation for Strategic Research and the Knowledge Foundation a structure that unites JM’s business model for developing residential units with a responsibility for long-term management of rental units in a way that is advantageous for society,” says Mikael Åslund, business unit manager for JM Property Development.