Niam divests Norwegian office property to H.I.G. Realty Partners

Niam has sold an office property, Jåttåvågveien 10-12, in Stavanger to a fund managed by H.I.G. Realty Partners.

The property is fully leased to the listed global engineering company Aker Solutions ASA and Akastor ASA. Located at Hinna office park, just outside Stavanger city and completed in 2012, the asset compromises more than 66 634 sqm, of which 15 764 sqm parking. In addition to Aker Solutions, the property is also housing the listed oil exploration company Aker BP ASA (sub-lease).

The Stavanger region has been at the core of global oil industry for nearly 50 years, since production started on the Norwegian Continental Shelf (NCS) in the 1970s, with the NCS accounting for 51% of all known and estimated future oil resources in the North Sea. Overall, the industry has contributed more than NOK 11 trn (€ 1.2 trn) to Norway’s gross national product. Over this period of time, approximately 45% of the extractable resources have been extracted from the NCS, meaning that the remaining 55% will continue to support the growth of the industry in Stavanger. Further, there have been several large findings in the North Sea in recent years, including the Johan Sverdrup field along with major oil fields Ivar Aasen and Gina Krog which started production in Q4 2016 and Q2 2017 respectively, with reserves of ~200 mn barrels of oil equivalent (boe) and a life span of 20 years each.

As the oil and gas industry has adapted to lower oil prices and new projects become profitable in this environment, activity levels are expected to increase, and key performance indicators suggest that Stavanger region has strong growth potential. Recent regional outlook surveys show a significant positive shift in sentiment among 600 companies in the region, based on questions about economic development in the prior 12 months and expectations of number of employees, turnover, profitability, investment levels and order backlogs in the coming 12 months. Across all indicators in the survey there is now an overweight of optimistic views with 70% of the businesses surveyed expecting growth in the coming year.

Akershus Eiendom acted as sole manager on the transaction, while Haavind and Selmer acted as legal advisor for H.I.G. and Niam respectively. PWC acted as financial advisor. The Norwegian asset manager Ness, Risan & Partners is H.I.G.’s partner on the acquisition.

In addition, and in a separate deal, H.I.G. Realty Partners has also acquired two assets from the Norwegian fund manager Union Eiendomskapital; Kanalsletta 2 and Kanalsletta 3, both located at Forus, Stavanger.

Niam is a leading private equity company in the Northern Europe real estate market, with approximately NOK 30 billion under management. Niam offers international institutional investors the opportunity to invest in the Nordic property market. The company was established in 1998 and has since invested more than NOK 70 billion since year 2000. Niam has a fully integrated investment team, totalling close to 50 professionals. Its HQ is located in Stockholm while also having offices located in Oslo, Helsinki and Copenhagen.

H.I.G. Capital is a leading global private investment business. H.I.G. Europe Realty Partners is the European real estate arm of H.I.G. Capital and has a broad exposure to the Nordic region.