The Swedish government has sold property company Vasakronan for SEK41.1bn (£3.5bn) as part of its privatisation drive

Sweden’s centre-right government will sell the property company, which owns 171 retail and office assets, to pension fund AP Fastigheter – the real estate arm of the Swedish national pension funds (AP Funds) - to pay down public debt.

AP Fastigheter, which is one of the largest property owners in Sweden, has property holdings of SEK38bn (£3.2bn) and owns and manages assets in Stockholm, Uppsala and Gothenburg. The combined company will have a portfolio of SEK80bn (£6.7bn).

The government, which has already sold a stake in Nordic stock market operator OMX, is seeking to raise SEK200bn (£17bn) from its privatisation plan by 2010. It is also looking to sell mortgage lender SBAB and the government’s share of Nordea Bank.