NORDIC/RUSSIA - One of Finland's key international investors indicated the market was approaching saturation last week as it sold off its remaining 39 hotel assets.

Northern European Properties (NEPR) is selling the properties for €800m to a fund managed by domestic investor CapMan.

Due diligence on the portfolio - which includes Holiday Inn and Radisson properties and has gross rental income of €50m- is scheduled for completion in March 2008 and the deal comes with a €25m vendor loan.

CEO Thomas Lindeborg told IPE Real Estate: "Our shareholders just didn't believe we were getting value, adding the sale did not indicate a strategic shift but "it does communicate that we want to move more into Russia - and that takes equity".

"We're selling in more mature markets, where we're getting yields of 6% and moving it into a market that offers 10%. The yields aren't really comparable because the risk is much higher [in Russia]. But our strategy is to buy asset-by-asset and we have a local operation so we can handle it."

A statement issued by the firm said the proceeds from the disposal would be "used with priority to pursue further acquisitions in Russia on a highly selective basis".

The firm's existing Russian portfolio includes hotels, shopping centres and logistics warehouses.