SWEDEN - Aberdeen has radically reduced its exposure to Swedish retail, just weeks after the 2007  Swedish Annual Property Index claimed it as the year's top-performing sector.

Marc Pamin, manager of Aberdeen's Nordic Fund I, told IPE Real Estate the fund had switched part of its €50m retail allocation t0 logistics because of retail's regionally low growth rates.  He cited a decline in consumer spending was one of the main reasons for the trend.

"Our in-house research showed growth rates for warehousing were significantly higher," he said. "After internal discussions, we decided to adapt the strategy for the fund."

According to a recently-published Jones Lang Lasalle report, Swedish logistics transaction volumes remained robust last year at €1.78bn.

Pamin's comments came at the same time as the fund acquired a logistics and distribution centre south of Jönköping for the fund. The acquisition represents a net initial yield of 6.1%.

But among those still bullish on Swedish retail is Andrew Allen, head of research and strategy at Cordea Savills, who recently told IPE Real Estate retail would "continue its strong performance". Allen cited GDP and rental growth as drivers, as well as the potential for upgrading dated shopping centres.

With equity of € 170m, Aberdeen's Nordic fund targets German institutional investors, including pension funds.

The firm last week completed its €110m acquisition of German fund manager DEGI from Dresdner Bank in a deal designed to strengthen Aberdeen in the "strategically important" German market.

Aberdeen's corporate acquisition strategy targets "in-fill" businesses that expand its geographic reach and product portfolio.