Madison strikes $163m in Norway deals

The New York-based firm is buying interests in an office in Oslo occupied by energy group Statoil and a joint venture owning retail property in the city

Madison International Realty has struck two deals in Oslo, Norway, for a combined total of $163 million, it has revealed. 

The New York-based firm, which typically buys partial ownership and joint venture interests in Class A properties and portfolios, has increased its stake in the Statoil office complex for $110 million, while in the second transaction it has acquired a 50 percent interest in High Street Shopping (HSS) for $53 million.

Both investments are being made from Madison International Real Estate Liquidity Fund V, which closed on $825 million of equity commitments in April, and a coinvestment vehicle. When Fund V closed, Madison already had a position in the Statoil office complex, having bought a 35 percent stake in 2012. It now has acquired a further 59.5 percent – 30 percent from Koksa, a Norwegian public company, and 29.5 percent from various individual investors – taking its overall ownership to 90 percent. The 721,000-square-foot, nine-story building is let entirety to Statoil, an energy and gas production company, on a 15-year lease.

Derek Jacobson, managing director of European investment at Madison, said: “This is a significant transaction for Madison as it has allowed us to acquire majority ownership of one of Oslo’s most iconic office buildings by providing an exit strategy for existing investors. The Statoil office complex is a prime, well-located and well-let asset in a core market that is well positioned to benefit from the strong Norwegian real estate market.”

In the second transaction, Madison bought a 50 percent stake in HSS, a 50:50 partnership between domestic firms Schage Property and Promenaden Property. That venture was founded in 2011 and owns Norway’s oldest department store, Steen & Strøm Magasin, as well as the neighboring property, Karl Johans gate 16, valued at more than NOK 1 billion (€120 million).

Madison already owns a 30 percent stake in Promenaden Property, which owns several properties in the heart of Oslo’s premier shopping district. The firm made that investment in 2013. Of this deal, Jacobson said: “This acquisition clearly demonstrates our confidence in the attractive underlying fundamentals of Norway’s retail sector.”