In a substantial expansion of its Norwegian property portfolio, Madison International Realty has acquired Schage Eiendom’s 50% stake in High Street Shopping, the owner of €180 mln worth of retail assets including Norway’s oldest department store.
HSS is a 50/50 partnership of Schage Property and Promenaden Property. It was founded in 2011 with the acquisition of the 92,000 m2 Steen & Strøm Magasin at Kongens gate 23, 27 and 29 in Oslo, as well as the neighbouring Karl Johans gate 16 property, for more than NOK 1 bn (€120 mln).On completion of the acquisition, Madison and Søylen own 100% of the assets which have a combined value of over €180 mln.
The deal was made in consultation with Søylen Property, the majority shareholder and managers of Promenaden Property, in which Madison holds a 30% stake. Promenaden Property owns nine properties located on or around Karl Johan, the main street in the Norwegian capital.
Commenting on the sale, CEO Egil Svoren of Schage Eiendom said: “The opportunity to make a significant realization came earlier than planned. Schage Eiendom is a developer with 5-10 years perspective on investment. A long-term focus and large projects are a part of our company’s spinal cord. After this transaction, we are even better equipped to assess new and exciting opportunities in the market.”
Derek Jacobson, managing director of European Investment at Madison, added: “This acquisition clearly demonstrates our confidence in the attractive underlying fundamentals of Norway’s retail sector. We continue to see increased demand for retail, particularly in the luxury sector. Our partnership with Søylen in Promenaden Property has been highly successful and we look forward to continuing to work with them.”
Schage Eiendom is a privately-owned Norwegian real estate company, based in Oslo and owned by two brothers, Knut and Bjørn Schage. At the end of 2013, Schage Eiendom had a gross value of NOK 7.3 bn, and net asset value of NOK 3.5 bn.
Madison is a private equity firm founded in 1996 which specializes in the ownership of interests or fractions of buildings with a core investment profile in major cities. The company manages €1.3 bn of capital and has European offices in Frankfurt and London. The company entered the spotlight in Europe two years ago when it acquired the 56.9% stake held by Morgan Stanley’s P2 Value fund in the Trianon Office Tower in Frankfurt.
The sale was part of the liquidation of the P2 Value fund. Madison entered Norway in late 2012 with the purchase of a 35% holding in Statoil’s newly built regional office at Fornebu outside Oslo for NOK 392 mln. In November last year Madison teamed up with Norway’s Søylen Eiendom in the acquisition of nine properties in Oslo’s premier shopping district valued at NOK 3 bn (€370 mln).