Lille Grensen 5

CapMan Nordic Real Estate II FCP-RAIF (“CMNRE II”) acquired in December 2017 a 4,700 sqm under-managed office and retail property (“Lille Grensen 5”) located in the heart of central Oslo from an international investor. The asset was the seller’s only investment in Norway and suffered from a short WAULT of less than a year and a high initial vacancy of 30%. The vacancy was expected to increase to approximately 70% within a year as the main retail tenant had already moved out and the space was temporarily leased out to a pop-up store.

CMNRE II identified multiple value-add angles and significant value creation opportunities through an extensive refurbishment program of the premises followed by re-gearing lease contracts at market terms as well as leasing vacant space to strong covenants and well-known brands. Within a year of acquisition, the team was successful in leasing almost 2,000 sqm of retail space on a long term 11 year lease to the Norwegian electronic retailer Power, one of the leading electronic retailers in the Nordic region. This lease was one of the largest signed retail leases (by rental value) in Oslo in 2018. In addition, the majority of the 2,500 sqm office space in the property was either leased to new tenants or re-leased on extended terms to existing tenants. The leasing activity undertaken by the team increased the average unexpired lease term in the property from 0.9 years to more than 8 years.

Besides fit-out of tenants’ premises, CMNRE II has refurbished and modernised the technical installations in the property, repainted and upgraded the façade and is currently working to certify the property in line with BREEAM In-Use standard.

The street Lille Grensen has one of the highest footfalls in all of Oslo and the property is located on top of the local metro station and only one block from Oslo’s premier high street Karl Johan. The subject area is one Oslo’s most liquid and attractive real estate investment areas and benefits from great local and international investor demand.

The reposition process from a value-add property to a modern multi-tenant property with long leases is about to be completed and has followed the original underwriting.