Carey Fund Partners for $105M Oslo Buy

OSLO, Norway—Net lease specialist W. P. Carey Inc., has acquired a multi-tenant retail site in Oslo, Norway for approximately $105 million (NOK 815 million), including transaction costs, in a joint venture with Oslo-based developer Winta Eiendom AS.

The acquistion is made by WPC's CPA:18 – Global fund. The seller is the real estate division of Coop Norge AS (COOP), the second-largest grocery retailer and a leading "do-it-yourself" retailer in Norway. As a cooperative, COOP is owned by 133 local cooperatives with 1.4 million members.

"This transaction offered the opportunity for CPA:18 – Global to secure a high-quality retail asset in a prime Oslo location. Given the city's path of development and the strength of the existing tenancy at the site, we believe the investment offers attractive current cash flow as well as the opportunity for potential future development, said Jason Fox, head of global investments at Carey. “The deal also provided funding for Coop Norge, allowing them to access the current value of their real estate holdings as a means of funding growth and expansion opportunities.”

Roy Meyer, CEO at Coop Norge Eiendom AS added: "W. P. Carey's global investing perspective and previous experience in Norway were invaluable in enabling us to complete this deal. Their ability to deliver on the required structure, along with their understanding of the strength of the asset and its location, made them the ideal buyer of our property us. We look forward to continuing our relationship as CPA:18 – Global's tenant at this strong retail location."

Located in Alna, a 1.8-million square-foot destination retail district in Oslo, the property is situated in one of the busiest and strongest retail clusters in the area. Leading from the Oslo central business district to the Gardermoen international airport, the facility is visible and accessible from the E6 motorway, Norway's second busiest road. Other major retailers in the area include IKEA, Tesla and Toys "R" Us.

Sixty-four percent of the facility's annual rent is derived from anchor tenant COOP Ost AS, the largest cooperative member of COOP. Other major tenants include Expert, Norway's second largest consumer electronics retailer, and Lampehuset, Norway's leading lighting retailer, which together represent an additional 23% of annual rental income. The leases have a weighted average remaining lease term of eight years.

The site currently includes 253,350 square feet of retail space, 46,800 square feet of basement/warehouse storage and 35,575 square feet of mezzanine office space. The geographical limitations for future development, along with the growth patterns of Oslo and the quality of existing tenants, supports current cash flow.

Winta Eiendom will act as local asset manager for the facility and explore potential value-add development opportunities for the asset. CPA:18 – Global's ownership interest in the property is approximately 90%.

Arctic Securities AS advised CPA:18 – Global and Winta Eiendom on the acquisition and provided long-term bond financing for the investment. DTZ Realkapital advised COOP on the sale.