Nordic real estate specialist NREP has raised €1.9bn for its latest fund to invest in underserved market segments.
NREP said the Nordic Strategies Fund IV fund, which mainly targets various forms of customer-centric residential rental properties, care homes and logistics real estate, has already committed more than 40% of the fund’s capital and has a deal pipeline which exceeds the fund’s remaining capital.
The amount raised by Fund IV exceeds the €400m raised for Fund I in 2014, the €600m raised for Fund II in 2016 and the €900m raised for Fund III in 2018.
NREP said Fund IV’s investors include Industriens Pension, Denmark’s pension fund for industrial-sector workers, and Novo Holdings, a 25% shareholder in NREP.
As previously reported, San Diego City Employees’ Retirement System (SDCERS) said it was considering a capital investment into the fund.
Other US pension funds including New York State Common Retirement Fund, the Los Angles City Employees’ Retirement System, Los Angeles Fire and Police Pensions and the Sacramento County Employees’ Retirement System have all committed to the fund.
NREP said the latest fund was capped to match the investment opportunity and demand from investors significantly exceeded the fund’s capacity.
Claus Mathisen, CEO of NREP, said: “We create value by making real estate better through more customer-centric and greener solutions. Our approach to real estate addresses structural needs that do not disappear with market cycles and has proven to be very resilient during the COVID-19 pandemic. We are seeing that recent market uncertainties have led to a large pool of new opportunities for us within our main segments.”
Initial investments by the fund include 12 care homes, primarily in Sweden, as well as a number of residential investments, like the development of 108 net-zero energy apartments just outside Stockholm, as well as a large residential project in Copenhagen’s South Harbor. The fund also includes several logistics investments in Finland, Norway, Denmark, and Sweden, the manager said.
Jani Nokkanen, CIO of NREP, said: “We recently got the opportunity to partner on a hotel property in downtown Stockholm, the Clarion Hotel Amaranten, which we will modernise to reduce the climate impact of the building.
“We are also seeing opportunities to improve the customer value proposition in the flexible office segment.”
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