Fabege is to acquire the City of Solna, Peab and Jernhusen’s stakes in Arenabolaget i Solna KB, which owns the Nationalarenan 1 property, better known as the Friends Arena.
The Friends Arena is a central part of Arenastaden, which is one of Fabege’s most significant urban development areas. Following the acquisition, Fabege and the Swedish Football Association (Svenska Fotbollförbundet, SvFF) will together pursue the continued development of the arena.
One condition for the transaction has been the completion of a previously planned capital contribution. As a result of the capital contribution, Arenabolaget is gaining the Nationalarenan 9 property, ‘Arenagate’, which comprises the entrance to the arena. This restructuring will substantially improve the future liquidity of Arenabolaget, both through the redemption of expensive financing solutions and through the repayment of loans. One condition for the implementation of the transaction is that approval is obtained from the City Council in Solna.
The new ownership set-up and capital contribution to ABS mean that Fabege’s net exposure in the balance sheet remains unchanged. The estimated impact on earnings in 2017 is expected to improve in comparison with the outcome for 2016, despite a larger holding.
Fabege’s holding after the restructuring amounts to 66.7 per cent, which means that Fabege is taking greater responsibility for future earnings. Through the equal division of ownership in the limited partnership ABS AB (50/50), Fabege and SvFF, as equal parties with an equal interest, will have joint responsibility for the future development of ABS. ABS will not be consolidated into the Fabege Group, but will instead continue to report its earnings as an associated company.
“Arenabolaget is being strengthened as a result, and Fabege will now, together with SvFF, be given improved conditions for pursuing the arena’s long-term future development,” commented Christian Hermelin, CEO of Fabege AB.
At the same time Fabege has come to an agreement with Peab to acquire Peab’s 50 per cent stake in Visio. Following the acquisition, Fabege will own 100 per cent of Visio, which owns development rights in Solna. Furthermore, Fabege is acquiring the Distansen 4, 6 and 7 properties in Ulriksdal from Peab.
Adjacent to the Friends Arena from Visio. Thereafter Visio retains its holding in Råsta, which includes development rights in Solna. Råsta is owned by Visio (75 per cent) and the City of Solna (25 per cent).
The purchase consideration for the shares in Visio amounts to a preliminary figure of MSEK 300 (EUR 31M), of which MSEK 200 (EUR 20M) is being paid via a promissory note that expires in connection with the development rights gaining legal approval, however no later than 31 December, 2018. Through the transaction, Visio will be consolidated into the Fabege Group, which means the initial property value will increase by approximately MSEK 550 (EUR 56M).
The purchase consideration for Distansen totals MSEK 570 (EUR 58M). The property is newly built and partly leased to Johnson & Johnson. The transaction also includes a newly-constructed multistorey car park, along with a development right relating to roughly 15,000 sqm of offices.
Handover will take place in January 2017.
“Both these transactions fit in well with Fabege’s investment in continued city district development in the various parts of Solna,” commented Christian Hermelin, CEO at Fabege AB.
Fabege Makes Several Acquisitions in Solna
Sweden — Fabege is on the move in Solna. The company has bought stakes to become the majority owner in Friends Arena. At the same time Fabege closes a deal with Peab to buy properties in Ulriksdal aswell as Visio.