European pension funds will be the primary investors in a pan-Nordic real estate SICAV to be launched by Aberdeen in the next few weeks.

Philip Ingman, managing director of Strutt & Parker Real Estate Finance Services (SPREFS), which is advising Aberdeen on the launch, said he also expected interest from investors from the Middle East and Ireland. Although the fund is open to both institutional and retail investors, 90% of investors are likely to be institutional.

The fund, which aims to raise €100m at its first closing, will target annual returns of 10—15%. The fund’s focus will be on retail and offices, with little investment in manufacturing and none in residential.

“I quite like the region – it has a Western European risk profile but with better returns,” said Ingman

Continued Nordic economic performance meant the current trend was “certainly sustainable”.

“The fundamentals are all very robust,” he said.

The Balkans could make up a 15% rider on a primarily Nordic fund because of their traditional link to Nordic economies, especially Finland. Ingman believes investment in the Balkans is unlikely to reach the maximum allocation.