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Purchased by M&G Real Estate for €230 million in 2017, Blekholmen’s excellent transport connections, combined with the efficiency and sense of community it offers tenants, make the asset well-positioned for the future.
Industry: Commercial Property
Headquarters: Stockholm, Sweden
The buildings in which we live , work and play shape our lives and the environment around us.
At its best, property can be a catalyst for positive change. Developers and landlords can therefore play a pivotal role in creating better outcomes, for people and for the planet.
As responsible property investors, we seek to enrich the lives of the people and communities we operate in. By doing so, we aim to create value for our investors, society and the environment. This means we can future proof investments for the long term, while also making a positive impact.
The value of investments will fluctuate, which will cause fund prices to fall as well as rise and you may not get back the original amount you invested.’
The acquisition of a large office complex in Stockholm, called Blekholmen 1, is an illustration of M&G Real Estate’s active and responsible stewardship of our customers’ investments.
This collection of six linked office buildings, purchased for €230 million in January 2017, is let to a broad mix of 30 tenants.
Blekholmen is in Stockholm’s relatively small central business district and has excellent transport links, being very close to Stockholm Central train station and the subway network. Its digital infrastructure is also high quality, offering high-speed broadband and digital signage within the complex.
The Swedish capital came third in the M&G European Urban Connectivity Ranking 2018, which rated the region’s cities based on their physical and digital infrastructure. This matters for investors since demand for office space is boosted by good connections, driving rental growth potential alongside buildings’ own connectivity.
The environmental impact of construction might be more visible, but it is estimated that between 80% and 90% of total emissions during a property’s life come from its operation. Think of all the energy that goes into lighting, heating and cooling an office.
Also important are the relationships between office buildings and the community. People want to work in places that make them feel happy, healthy and productive. Neighbours would prefer any negative impacts, like traffic, from higher density to be mitigated through developed transport infrastructure.
Blekholmen 1 in numbers
As landlords, we have signed “green” lease clauses with tenants that make a joint commitment to reduce our environmental impact, including managing and monitoring energy and water consumption. The property has received a maximum BREEAM* In-Use score for waste management.
Sustainable ways to commute are also promoted, with digital signs in the entrance displaying real-time public transport information.
Blekholmen 1 has an important role to play in facilitating wider socio-economic benefits. This is partly achieved through our tenants. State-owned Samhall is one of Sweden’s largest employers and leaders in creating innovative jobs for people with disabilities.
Every bit as important as its environmental and societal credentials, is the key economic function that Blekholmen 1 fulfils.
Strong economic growth in Sweden has continued to boost demand for modern purpose-built office space. With supply limited, demand pushed commercial rents in Stockholm up by 12.9% in 2017.
We believe Blekholmen’s excellent connections, combined with the efficiency and sense of community it offers tenants, make the asset well-positioned for the future. For our investors, these dynamics should help deliver sustainable risk-adjusted returns, including resilient income streams, over years to come.
The value of investments will fluctuate, which will cause fund prices to fall as well as rise and you may not get back the original amount you invested. The level of any income earned by the fund will fluctuate.
* BREEAM = Building Research Establishment Environmental Assessment Method. This information is not an offer or solicitation of an offer for the purchase of shares in any of M&G’s funds. Before subscribing you should read the Prospectus and the Key Investor Information Document. This financial promotion is issued by M&G International Investments S.A., Registered Office: 16, Boulevard Royal, L-2449, Luxembourg and M&G Securities Limited (registered in England, No. 90776), authorised and regulated by the Financial Conduct Authority in the UK. Registered office: Laurence Pountney Hill, London EC4R 0HH. The Portuguese Securities Market Commission (Comissão do Mercado de Valores Mobiliários, the “CMVM”) has received a passporting notification under Directive 2009/65/EC of the European Parliament and of the Council and the Commission Regulation (EU) 584/2010 enabling the fund to be distributed to the public in Portugal.