TG Partners A/S
10 PROPERTIES – 12 INVESTORS
The fund THYLANDER 1 was established in 2008 with a view to investing in properties in Copenhagen following the financial crisis. In 2010-2011 we made investments for a total of DKK 750m distributed across 10 well-situated properties in Copenhagen, Frederiksberg, and Hellerup.
EXAMPLE – NY ADELGADE 3, COPENHAGEN K
The property comprises 1,275 m2 distributed across eight residential and two commercial tenancies. The property was purchased in 2010 from a bankruptcy estate for a purchase price of DKK 23.5m. At the time the rentals were DKK 1.37m and the result before interests DKK 1.07m.
Today the rentals comprise DKK 1.98m, and the result before interests DKK 1.56m.
The property has just been put on the market for DKK 42m. The sale will provide a net profit of DKK 15m and an equity rate of return of 48% p.a. for the investors.
In connection with the purchase we identified a number of disorders and an operations and maintenance backlog. This enabled us to terminate and renovate four tenancies and re-let the flats at a significantly higher rent. In addition, we have made a series of basic improvements – e.g. fitting new eco-friendly and noise-reducing double-glazed windows – enabling us to increase the rent level for all tenants. Furthermore, we have secured an increase in the rent level through correction of historically (low) rent adjustments as well as through renegotiation of the terms of the commercial tenancies in connection with the change of tenants and streamlining operations and management.
The opportunities for value creation were identified in connection with our enquiries prior to the purchase and were part of the business plan for the property which formed a basis for the final decision to invest.
DKK 3.3m have been invested in improving the property. During our ownership the result of the property before interests has increased 46%.