Listed Swedish property company Kungsleden is selling two commercial properties for a total price of SEK 279 mln (EUR 31 mln), reflecting a yield of 6.4%. The buyer is St Erik Markutveckling, a wholly owned subsidiary of the City of Stockholm.

The sale - which is in line with book value and acquisition costs - is conditional on approval by the City of Stockholm's municipal council and completion is scheduled for December 2011.

The properties are located on the outskirts of the Slakthusområdet wholesaling estate in Johanneshov, south of Stockholm. They offer 25,000 m2 of warehousing and processing space.

The divestment follows the decision by the City of Stockholm to implement an extensive regeneration on the Slakthusområdet site as part of its Vision Söderstaden 2030 (vision for the southern city) development strategy. The Municipality plans to transform the area into a centre for events and leisure, with arenas, offices and housing.