KMC Properties acquires logistic property in Narvik for NOK 90 million

07 Dec 2022 08:00 CET

KMC Properties ASA, a real estate company focusing on industrial and logistic
properties, announced today that it has entered into an agreement for the
acquisition of a logistic property, including a dry-, cold- and freeze storage
facility outside Narvik, Norway, for NOK 90 million.

The property is composed of 22 357 m2 BTA of land and 16 400 m2 of a building
that was erected in 1998, 2001 and 2011. All buildings were substantially
upgraded in 2011. The property is strategically located in a logistic hub south
of Narvik city center, close to the E6 motorway, the railway and port terminal.

“This logistic property has a great potential to become a very profitable
investment to us. Based on existing lease agreements, we have a solid yield on
the property. However, almost half the facility is vacant, leaving us with
expectations for improved profitability, says Liv Malvik, CEO of KMC Properties.

The property has a lease agreement with the Norwegian meat producer Kuraas AS
for approximately 4 500 m2, with an initial lease of 15 years and an option to
extend, starting 2 January 2023. The new logistic property is located next to
the meat processing facility acquired by KMC Properties in February this year,
also with a lease agreement with Kuraas. As a part of the new agreement, Kuraas
has replaced its existing bare house contract with 6 years remaining lease with
a new 15-year triple-net bare house agreement for the processing facility.

In addition, KMC Properties has signed a lease agreement with a service provider
for an additional 4 100 m2, with an initial lease of 10 years and an option to
extend, starting between 2 January and 1 March 2023. The tenant is a large and
solid company specialized in delivery of groceries.

The annualised lease for the current contracts amounts to NOK 5.7 million for
2023 and NOK 8.0 million (excluding CPI adjustment) for 2024. The contracts will
be subject to 100 per cent CPI adjustment from 1 January 2024. In addition,
almost half the property is currently vacant, enabling a potential for
significant additional income.

Kuraas is a Norwegian producer of meats, headquartered in Narvik. The company
has approximately 110 employees and reported NOK 238 million in revenues in
2021, representing a significant growth over the previous year. By entering this
new contract, Kuraas will consolidate its operations, improving efficiency and
profitability.

The acquisition will be financed through a combination of bank loan and equity.
The transaction is expected to be completed on 2 January 2023.

For further information, please contact:
Liv Malvik, CEO of KMC Properties ASA, tel. +4748003175

About KMC Properties ASA
KMC Properties is an Oslo Børs listed real estate company focusing on
industrial- and logistic properties. The company has a diversified portfolio of
properties in the Nordics and the Netherlands. The properties are strategically
located and have long lease agreements with solid tenants.

KMC Properties has an ambitious strategy to grow the portfolio through further
development of existing properties, as well as M&A initiatives.

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