KMC Properties ASA - Acquisition of Danish property with new large multinational industrial company as long-term tenant

19.04.2024 05:00

KMC Properties ASA has agreed to acquire a Danish light industrial property for a total transaction value of NOK 200 million at a gross yield of 7.5 per cent. The property's tenant is the European leader in development and manufacturing of roof windows Velux A/S. The transaction is in line with KMC Properties' value accretive growth strategy, and a reflection of its ability to act on attractive opportunities in the current real estate market. "In our pursuit of becoming the preferred real estate partner for industrial and logistics companies, we are thrilled to bring Velux into our portfolio of strong tenants. Velux has demonstrated remarkable growth and stable profitability. With its commitments to its local communities and the environment, the company represents an attractive long-term partner for KMC Properties." says Liv Malvik, CEO of KMC Properties. In 2023, Velux delivered DKK 21.7 billion revenue with improving operating margins and has global operations with sales and manufacturing across 37 countries and approximately 11 700 employees. The company has a strong sustainability commitment reflected through clear targets incorporated in its strategy, including a target to cut emissions from operations by 100 per cent and half its value chain emissions by 2030. The property represents one of 21 Velux production sites and is located in an industrial cluster in Skjern on the west coast of Denmark. It has a triple net barehouse lease contract with a 11.5-years WAULT and 100 per cent annual CPI adjustments. The land area measures 152,533 square meters and holds potential for development. The transaction will be financed by approximately NOK 100 million bank debt provided by Nordea at a fixed interest rate of 1.08 per cent interest margin plus a five-year CIBOR swap set on expected closing date 3 June 2024. At current market rates this is equal to a fixed all-in interest rate of 4.12 per cent, representing an accretive 3.38 percentage point yield gap. As a reference, KMC Properties had an overall yield gap of 1.01 percentage point at year-end 2023. The equity side of the transaction will be covered by parts of the cash inflows from the NOK 100 million resetting of seven interest rate swap agreements on 22 March 2024. The property is expected to yield a higher internal rate of return than the seven swaps, at a substantially longer duration. Hence, capital reallocation represents an accretive way to finance growth, creating long-term value for the company's shareholders. For further information, please contact: Liv Malvik, CEO tel. +4748003175 Kristoffer Holmen, CFO tel. +4792814862 Christian Linge, Interim head of M&A tel. +4746637846 About KMC Properties ASA KMC Properties is an Oslo Børs-listed real estate company focusing on industrial and logistic properties. The company has a diversified portfolio of properties in the Nordics, Belgium, Germany and the Netherlands. The properties are strategically located and have long lease agreements with solid tenants. KMC Properties has an ambitious strategy to grow the portfolio through further development of existing properties, as well as M&A initiatives.