A consortium of Danish investors involving non-profit social enterprise Realdania (25%), Carlsberg (OMX: CARL B 25%) and three pension & insurance companies PFA Pension (20%), PenSam (15%), and Topdanmark (OMX: TOP, 15%) acquired former Carlsberg brewery site in central Copenhagen in a 2.5 billion DKK transaction the Danish brewing company said in a release. Carlsberg will book a 1.7 billion DKK pre-tax capital gain in Q2 2012 accounts. The proceeds will be used to deleverage the Group.
Carlsberg decided to stop producing beer at the Valby Brewery site in 2006. The site is the location of the original Carlsberg brewery and beer had been produced there for over 160 years. The area is now known as Carlsberg district or Carlsberg City and it spans more than 300,000 square metres. The company has been looking at ways to develop the place into a new city quarter of international allure where industrial history and modern city interact.
The transaction covers an area of more than 250,000m2, thus excluding some historical areas that will remain under Carlsberg’s exclusive ownership. Some old buildings in the covered area will be refurnished and new buildings with over 500,000 m2 of floor space will be erected. There will be commercial, residential and cultural areas. The tallest high rises will reach 120 metres. The development plan is based on an award winning design from a local architectural firm Entasis. The project is expected to take some 15 years.
The development transaction is the largest in Danish history and is a major undertaking also in European scale. The companies feel that it can generate attractive returns. There is obviously a higher than normal risk involved too. Carlsberg’s share reacted positively with over 1.5% gain on Thursday.
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