FINLAND - The Finnish real estate market remains a good investment opportunity, according to investment management firm Doughty Hanson which has just sold three shopping centres in Helsinki and Oulu.
The assets, now sold to ING Real Estate for €186m, made up part of a retail portfolio the firm acquired in 2004 from the €21.6bn multi-employer Ilmarinen Mutual Pension Insurance Company in what was at that time the largest cross-border real estate transaction in Finland’s history.
"Typically, they go in and try to add value to properties over a certain timeframe," said Duncan Murray, a spokesman for Doughty Hanson. "Of the group of eight properties they bought with the portfolio, only one hasn’t yet been sold. The portfolio has been a great success."
Gross IRR on the portfolio – acquired for the 21-asset €590m Doughty Hanson & Co Real Estate Fund I – is 55%. The remaining asset, the Iso Omena shopping centre in Helsinki, is still on the market.
The fund’s successor is 25% invested across the UK, Italy and Sweden, with €130.8m of equity committed. Although Murray said the firm "absolutely" viewed mature European real estate markets positively, the fund is not targeting specific markets.
"It’s an opportunistic fund so it depends what’s out there," he said.
Finland has proved almost irresistible to pension fund investors in recent months, not least because of strong fundamentals.
In January, Ilmarinen, Dutch pension fund ABP and Denmark’s €49.6bn ATP fund committed equal capital to a Finnish real estate fund set up for them by Aberdeen Asset Management. The fund has a target size of €500m.
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