OSLO, NORWAY: KMC Properties ASA, a real estate company focusing on industrial and logistic properties, today announced the signing of a Letter of Intent (LOI) with Slakteriet Holding AS to build a new salmon slaughterhouse facility at Florø, in the Vestland county on the Norwegian western coast. The investment is estimated at NOK 620 million.
“KMC Properties continues to deliver on its ambitious growth strategy, and we’re excited to have signed this letter of intent with a well-established company such as Slakteriet, whose quality of salmon slaughter is widely-recognized,” says Liv Malvik, CEO of KMC Properties. “Through this agreement, we further diversify our customer portfolio within the seafood sector, adding another modern facility with long-term lease agreement against a solid counterparty,” Malvik adds.
Slakteriet AS has a 30-year history of slaughtering salmon at Florø and is now seeking to develop a modern, new facility in the industrial coastal area. The construction cost is estimated to be approximately NOK 620 million, and the yield-on-cost is estimated between 6.75-7.1 per cent of the total investment cost.
KMC Properties will be responsible for building of the facility, and the construction work is expected to commence in 2022, with scheduled completion in 2023/2024. The parties have agreed on a triple-net bare house agreement, with an initial lease term of 20 years, with the option of a 10-year extension.
Established in 1989, Slakteriet is one of Norway’s biggest fish slaughter companies, with major facilities in Florø and Brekke. The company is growing steadily and has a solid financial position, posting NOK 191 million in revenues and NOK 34 million in EBITDA in 2020. Slaughter volumes have gained 28 per cent in the past five years.
Strategically located in the industrial cluster Fjord Base in Florø, the new facility will be a state-of-the-art slaughterhouse, with robotic technology and automation solutions. In addition, the facility will include production lines for filleting and further processed products, as well as significantly increase the cooling and deep-freezing capacity. Slakteriet will invest approximately NOK 390 million in fitting the facility with machines and equipment. The facility will have a clear environmental profile and will be equipped with solar cells on the roof.
“We look forward to collaborating with KMC Properties on the development of our new facility, which will allow Slakteriet to increase harvesting capacity by up to 250 per cent, increase our competitiveness through greatly reduced operating costs per unit, and enable significant environmental improvements in the form of reduced energy consumption, emissions and risk of infection,” says Kristin Bergstøl Hansen, CEO of Slakteriet.
The acquisition will be financed through a combination of bank loan and equity. A final decision on the execution of the project will be taken after the preliminary project work has been completed in end of 2021.
This is KMC Properties’ fourth greenfield development agreement announced the last year, of which the last two are with new tenants. KMC Property’s portfolio currently consists of over 40 assets, primarily in the Nordics, constituting approximately more than 340.000 sqm in total.
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