NREP targets €1.25bn capital raise for latest value-add real estate fund

Nordic real estate specialist NREP is planning to raise €1.25bn for its latest fund to invest in underserved market segments, according to people familiar with the matter.

Fundraising for NREP Nordic Strategies Fund IV is expected to exceed 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 declined a request for comment.

In a board meeting document, the San Diego City Employees’ Retirement System (SDCERS) said it is considering issuing a $30m (€27.1m) commitment to the fund, which will focus on logistics, student housing, serviced living, care homes and other senior housing.

The value-add fund has a net internal rate of return target of 13%.

The Townsend Group, which is advising SDCERS, said the investment would help diversify the the $8.4bn pension fund’s international real estate portfolio.

Real estate represents 10.4% or $876m of total assets.

The planned commitment by SDCERS will be its first real estate investment for the fiscal 2020 year which commenced in July. Its investment strategy allows for up to $60m to be placed into non-core strategies.

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  • NREP Nordic Strategies Fund III

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