STOCKHOLM, Sweden, July 17, 2003 (PRIMEZONE) -- The sale is an element in Drott's (Other OTC:DOTBF) new strategic direction, which entails a higher turnover in the portfolio and the sale of properties where no further measures or other factors are expected to increase cash flow and create value.
Properties
The two properties sold are Hammaren 15 on Regeringsgatan in downtown Stockholm and Marievik 28 ("Aurora") in Marievik, south of the city. The properties are fully leased.
- Hammaren 15 (leasehold) was built in 1978 and has 25,200 square meters of rentable space, including 14,100 sq. m. of office space and 8,800 sq. m. of garage space. Tenants include Nordea and VPC.
- Marievik 28 was built in 2002 and has 20,800 sq. m., of rentable space, including 20,600 sq. m. of office space. The tenants are Teleca and Vin & Sprit.
Annual rent amounts to SEK 133 million.
Buyer
The buyer is Grundbesitz Global, and the tentative closing date is October 1, 2003. Grundbesitz Global is an open-end real estate investment fund managed by DB Real Estate, a wholly owned subsidiary of Deutsche Bank.
Effect on Drott
The price amounts to SEK 1,460 million, which is 2 percent higher than the independently appraised market value of the properties as of December 31, 2002. The sale results in a capital gain of approximately SEK 280 million, which will be reported in the third quarter. Provisions of SEK 40 million for anticipated future expenses resulting from the sale are taken into account in the estimated gain.
The fiscal residual value of the properties is approximately SEK 1.0 billion less than the sales price. Existing tax loss carryforwards are expected to be utilized to a corresponding degree, due to which there will be no income tax charge.
Based on the operating surplus from current leases, the sales price corresponds to a direct yield of 6.8 percent. The sale initially reduces the Group's cash flow before tax by approximately SEK 40 million on an annual basis.
Drott AB (publ)
For further information, please contact: Anders Boos, President, +46 8 769 30 10
Drott is being divided into two publicly listed companies:
- Shareholders at the Annual General Meeting in 2004 will vote on a proposal to distribute Bostadsaktiebolaget Drott, which will be a streamlined residential real estate company active in growth regions.
- Today's Drott will change its name to Fabege and will be an active, streamlined commercial real estate company focused on Stockholm.
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