Transforming the “Optimus” area in Upplands Väsby from office and warehouse into primarily 70,000 sqm of residential apartments
The Optimus Residential Development includes one mixed-use property in Upplands Väsby (northern Stockholm), Sweden, with a total lettable area of approximately 36,500 sqm at acquisition. The primary strategy is to maintain three office buildings with ~16,000 sqm of lettable area and obtain a new zoning for over 70,000 sqm (gross area) of residential building rights. A highly attractive feature of the investment case is that we have benefited from stable cash flow over many years while we proceed with the new zoning process. The property is large (49,000 sqm gross area) and consists of primarily office and warehouse space with a light industrial feel to the area. The location is ideally situated for a conversion to primarily rental and owner-occupied residential apartments since it is located in close proximity to the train station (about 450 meters) providing convenient access to Stockholm (30 min), Arlanda Airport (10 min) and Uppsala (25 min)
Since 2017, we signed new leases for over 10,000 sqm including a new 10-year lease (2,500 sqm) with the Stockholm County Council and a new five-year lease (4,200 sqm) and a new 10-year lease (530 sqm) with the municipality of Upplands Väsby. The majority of the lease contracts in two of the office buildings that will be maintained are with tenants in the public sector. We also made the strategic decision to sell 20% of the company in 2017 to a joint venture partner called Byggvesta, which is a leading developer of rental apartments in Sweden. In connection with the sale, we refinanced the company and were able to distribute 71% of the drawn equity back to investors. Additionally, we have tested the market interest in the future residential building rights by pre-selling approximately 30% to various leading residential developers thus reducing the risk level of the investment. We continue to make progress toward obtaining a new zoning for the property targeting over 70,000 sqm (gross area) of residential building rights, and the zoning is expected to be in force during 2023.