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Case Lybeck

CapMan Nordic Real Estate Fund II (“CMNRE II”) acquired a 30,000 sqm under-rented office property (“Lybeck”) in central Stockholm from a Swedish residential developer in December 2017. The developer had planned to demolish the existing building and fully redevelop the site as residential. However, when the residential market stalled, the company decided to de-risk their balance sheet by selling Lybeck to CMNRE II in an off-market transaction. The investment team saw multiple value creation opportunities in the existing office building and underwrote the asset with a plan to refurbish large parts of the property and bring rents to market. In addition, the team addressed the inflated operating expenses by improving the energy efficiency of the property and re-tendering all utility, service, and insurance contracts.

Besides the value-add potential, Lybeck is ideally located in a vibrant and expanding city area with an underground station in the immediate vicinity.  The area is part of a new urban development called Norra Djurgårdsstaden which will benefit from energy-efficient modern buildings and large amounts of green space when fully completed.

Since acquisition, the fund has refurbished a large proportion of the space in the property, signed multiple new leases as well as re-geared existing contracts. Two of the new leases are with government agencies for a total area of approx. 10,000 sqm.

The asset is on track to be fully repositioned by mid 2022 in line with the original business plan.

The team is currently working on establishing approximately 18,000 sqm of additional building rights on and around the property. This is additional upside potential outside of the original business plan.