Dutch pension giant APG buys into Finnish resi

Dutch pension fund asset manager APG has taken another step in the internationalisation of its residential property strategy by becoming the second-largest shareholder in the €2.4 bn Finnish landlord Sato.

APG Asset Management - which managed €359 bn of assets at end-April 2014 - acquired the 22% shareholding from Finland's Varma Mutual Pension Insurance Company.

Sato is a fully integrated private residential company which owns and rents about 24,000 residential units in Finland and St Petersburg. The company has a portfolio of about €2.4 bn residential units and it aims to grow this to €4 bn by 2020.

For APG, the investment marks a further step in its residential property strategy. Robert-Jan Foortse, head of European Property Investments at APG, said: 'APG is focused on increasing its residential exposure in Europe, particularly in key metropolitan areas that have a growing population. For many years APG has been a significant investor in the residential sector in the Netherlands.

'More recently we have made two investments in the residential sector in London. Sato is an interesting investment opportunity for us. The expected favourable demographic trend in the Helsinki Metropolitan Area underpins the demand for the rental apartments provided by Sato,' Foortse added.

Varma, which is almost 10 times smaller than its Dutch counterpart in terms of investment assets, remains the largest investor in the Finnish rental housing company.

Varma sold 50% of its holdings to APG, and retains 22.8% after the transaction. 'In recent years Varma has increased its ownership in Sato, becoming the largest shareholder in the company. Even after the transaction, we remain a large shareholder. This transaction is a demonstration of the success of Sato's long-term strategy to become a leading rental housing company in Finland,’ said Varma's chief investment officer Reima Rytsölä.

SEB acted as the financial advisor to Varma in the transaction.

Varma Mutual Pension Insurance Company is the largest earnings-related pension insurer and private investor in Finland. The company’s investment portfolio amounted to €38.7 bn at end-March 2014.

PropertyEU is holding its latest briefing on the European residential property market as part of the international day at PROVADA in Amsterdam on 4 June.