BRIEFING: Resi and retail investment get the nod in the Nordics

Residential and retail property emerged as popular segments for investment in the Nordics during PropertyEU's latest Investment Briefing.

Asked how he would invest a notional €500 mln, Pertti Vanhanen, group head of property at Aberdeen said he would seek to build a 'diversified portfolio of quality assets to fit my risk profile.'

'If you really wanted to be opportunistic then you would buy retail boxes, a segment where you can get really high yields but there are also high risks,' Patrik Kallenvret, a managing director at CBRE in Sweden told the event hosted by Aberdeen Asset Management in London on 27 March 2014. There are a number of these opportunities in the Nordics, he added, 'especially in Sweden and Finland, though not in Denmark'.

Kallenvret also said he would go into mid-sized cities and buy big portfolios with a lot of assets, using local knowledge and local people on the ground to earn a 7-8% return. 'I think the institutional money is lacking there in Sweden. If I really had a lot of equity I would like to go in and get the high yield with really no risk. I would turn to 10-15 different cities and build up those portfolios.'

Peter Lilja, director of Situs Nordic Services, Denmark said he would use a broadly similar strategy. 'But I would follow the demographics in the local markets from the residential side and follow the business. In Sweden, we have areas, for instance, that are very focused on the medical industry. My approach would be around new, sustainable offices for the oil and gas industry in Norway.'

LIQUIDITY SPLIT
Thomas Völker, vice-president international real estate finance for Continental Europe at lender Helaba, said he would split the €500 mln in accordance to the liquidity of the different country markets and segments. 'It would be retail and offices in Finland, with residential and retail in regional cities in Sweden, and offices in suburban Stockholm. Residential and retail are very interesting in Demark, while offices in the Norwegian oil port city of Stavanger could be a good bet for the future.'

Rikke Lykke, managing director of the Nordic business for German investor Patrizia Immobilien, said she would look into value-add plays. 'This could be residential value-add or office conversion value-add,' she said. 'Specifically for Norway and Denmark I would look into high-street retail; the Norway story is a value-add but the Danish one is a core transaction.'