Listed Swedish property company Kungsleden is divesting 17 properties in Germany for a total of SEK 1.3 bn (EUR 144 mln). The transaction reflects a property yield of just over 7%. The buyer is Hemsö Fastighets, in which Kungsleden is a joint venture partner.

The properties consist of retirement homes, the majority of which are located in the Rohr region and in Frankfurt. The gross leasable area is around 75,400 m2 and total rental value is EUR 10.9 mln. The sales price is about SEK 20 mln below book value and some SEK 35 mln less than acquisition cost.

'Kungsleden acquired this property portfolio in Germany in 2006 and 2007. Through the formation of Hemsö, the retirement homes portfolio in Germany is no longer such a natural component of Kungsleden, but fits better in Hemsö,' commented Kungsleden's CEO Thomas Erséus.

'This portfolio has stable returns, and with Hemsö as its owner, we will benefit from ongoing earnings, while also freeing up funds for property acquisitions that suit Kungsleden’s portfolio better,’ he added.

The divestment is conditional on funding and a concluded due diligence process. Completion is scheduled for the first quarter of 2011.