A commercial property located in Tierp, Sweden, is currently available for investment at a price per share of 30,000 SEK, offering an estimated minimal return of 13% on a property valued at 6,000,000 SEK. The property, managed by an experienced developer, is situated in Tierp city center, boasting convenient access to local amenities and transportation, including being just 100 meters away from Tierp station with a direct link to Uppsala in under 25 minutes.
Comprising 19 apartments totaling around 1,290 square meters and eight ground-floor premises spanning approximately 1,150 square meters, with seven of these premises already leased out, the property is part of a portfolio valued at approximately 112 million SEK, with a mortgage of around 40% loan-to-value ratio.
The developer's plan involves mortgaging the property to fund stock exchange activities and minor renovations, leading to a strategic conversion of the rental units into a condominium association. With successful past projects in Alunda and Umeå, the developer aims to replicate this success, with renovation work commencing in June 2024 and sales expected to start in August 2024, following the completion of the transformation.
Despite the potential for condominium sales, the option to retain the property as a long-term rental remains viable due to the high demand for housing in Tierp municipality, particularly in the city center. A recent valuation by Forum Fastighetsekonomi AB in April 2024 estimated the market value at around 30 million SEK, with a loan-to-value ratio of approximately 57%, supporting the decision to borrow up to 6 million SEK for renovation financing.
Secured by real estate mortgage, property bond, and limited personal bond, the loan, with a 13% annual interest rate, offers investors the opportunity to participate in a well-structured investment with the potential for long-term growth and stability, underpinned by the strengths of the existing property portfolio and the developer's proven track record in property management and development.