Target Information

eQ Hoivakiinteistöt, a specialized real estate fund, is selling 48 properties predominantly focused on assisted living facilities and daycare centers to Samhällsbyggnadsbolaget i Norden AB (SBB) for approximately €142 million. This transaction is scheduled to close on April 29, 2019. SBB is recognized as one of the leading owners of social infrastructure properties in the Nordic region.

Founded in 2012, eQ Hoivakiinteistöt has experienced significant growth, with its real estate assets reaching €1.1 billion by the end of March 2019. It stands as the largest owner of care properties in Finland, managed by a team of ten professionals. The fund's real estate portfolio is well-diversified both regionally and in terms of property types. The current sale represents a major divestment from the fund.

Industry Overview

The Nordic region is known for its robust welfare system, driving demand for social infrastructure properties such as care homes and educational facilities. In Finland, the aging population has substantially increased the necessity for assisted living and long-term care facilities, presenting lucrative investment opportunities in the sector.

Additionally, the Finnish government has been proactive in supporting the development of these types of facilities to ensure quality care is available to its citizens. This support, combined with an increasing public and private investment in the sector, enhances the market attractiveness for investors. There is significant potential for growth given the country's demographic trends.

The daycare sector, while historically less prioritized, has also been gaining attention due to increasing parental involvement in the labor force and the subsequent demand for quality childhood education and care services. The synergy between assisted living and daycare centers in property portfolios creates a comprehensive investment landscape within the social infrastructure framework.

Moreover, as public awareness of the need for high-quality care facilities grows, the market is seeing a shift towards greater investment in sustainable and innovative housing solutions. This evolution is poised to offer refined services while potentially increasing the returns on investments in these properties.

Rationale Behind the Deal

This transaction represents a strategic move for eQ Hoivakiinteistöt, aligning its portfolio more closely with larger, more central care and community properties. The sale will reduce the number of properties in its portfolio from 197 to 149, allowing for larger unit sizes, which will streamline management and enhance operational efficiency.

With the ownership concentration now elevating to 57% within the metropolitan area and 40% dedicated to assisted living, the fund is poised to strengthen its market position while optimizing its asset management approach. SBB's reputation as a valued entity focusing on care and community properties further underlines the credibility of this transaction.

Investor Information

Samhällsbyggnadsbolaget i Norden AB (SBB) specializes in the ownership and management of social infrastructure properties across the Nordic region. The firm has established itself as a key player in the sector, with a portfolio that emphasizes sustainability and community service.

By acquiring properties from eQ Hoivakiinteistöt, SBB not only enhances its asset base but also reinforces its objective of providing quality social housing solutions. The acquisition aligns with the firm's long-term strategy of expanding its portfolio in the rapidly growing care services sector.

View of Dealert

The sale of properties from eQ Hoivakiinteistöt to SBB can be viewed as a strategic and prudent investment decision. The focused divestment enables eQ to consolidate its position and manage its holdings more efficiently while continuing to emphasize larger, impactful properties in its core areas of interest.

This deal signifies strong market activity and reflects an increasing interest in social infrastructure investments, particularly in a country where demographic trends suggest ongoing demand for such facilities. Investors can expect potential long-term gains from this transition, ensuring a stable operational framework for both parties.

From a broader market perspective, this transaction underscores the health and dynamism of the social infrastructure property market in Finland. It exemplifies how established investors like SBB are strategically positioning themselves to capitalize on emerging opportunities, while allowing eQ to streamline its operations and elevate investment focus.

Overall, this deal appears to be a beneficial move for both entities involved, promoting growth and optimization in the increasingly significant social care investment sector.

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