CBRE Global Investors’ new head of Nordics Rik Eertink is looking to benefit from the ‘strong fundamentals’ in the region this year.

CBRE Global Investors’ new head of Nordics Rik Eertink is looking to benefit from the ‘strong fundamentals’ in the region this year.

Eertink was appointed head of Nordics at CBRE Global Investors in February. The Stockholm-based Dutchman has also become fund manager for the CBRE Nordic Property Fund and joined the EMEA management board.
Eertink, 34, has worked for CBRE Global Investors for over nine years. He started his career in 2004 within ING Real Estate in the Netherlands and worked on various retail-dominated portfolios for ING REIM before the company was taken over by CBRE in 2011. He moved to Stockholm with his family in September 2011 to head up CBRE GI’s asset management activities for Sweden first and as of summer 2012 for the total Nordic region.
Eertink also chairs the Next Generation Group for the International Council of Shopping Centers (ICSC) across Europe and is a member of ICSC’s European Advisory Board. Here, he tells PropertyEU about the priorities in his new role and his ICSC activities.

PropertyEU: What is the outlook for the Nordic property market this year?
Eertink: The economic outlook for all core markets in Europe, including the Nordics, is favourable. Sweden, Norway and Finland have clearly outperformed the European average historically in terms of economic growth, and the five-year outlook for Norway and Sweden in particular is - with 2 to 3% real GDP growth per year - promising. On the retail side, consumer confidence improved rapidly during 2013 which is a good sign as it is one of the drivers of growth. Rents in all sectors remained relatively stable during the financial crisis and the Nordics are forecast to show the highest rental growth in Northern Europe going forward. So the fundamentals are strong, one of the reasons why I decided to take on this role.

PropertyEU: Which of the four country markets will stand out this year in terms of cross-border investment?Eertink: Of the three main Nordic markets, Sweden is the most liquid and the most sizeable in terms of real estate. A challenge here for foreign money is the currency effect which adds another cost layer. This can make things difficult if, as a foreign investor, you have to compete with local equity.

PropertyEU: What type of foreign money is seeking to access the Nordics?
Eertink: We’re seeing a very wide range of investors, from leading global institutional players - both US-based and from Europe - as well as money from Asia. For example, in two weeks’ time we will organise an investor trip for a leading investment platform from Asia which wants to understand the Nordic investment possibilities.

PropertyEU: What sort of product are international investors looking for?
Eertink: As core product throughout northern Europe is scarce, investors are broadening their scope. They are looking at different types of assets and different types of risk. Given our local footprint with offices both in Sweden and Finland, we believe that we are well positioned to service clients within this wider investment scope.

PropertyEU: Is there enough product?
Eertink: In a word: no. In the last period it was always a problem to find the equity to deploy into assets, now it’s the other way round. We started 2014 with about €4 bn of dry powder at EMEA level and we’re looking to capture a fair share of that in the Nordics. We’re not only in the market for European-based capital but also for non-European institutional capital. Besides Germany, the Benelux and France, the Nordics is one of the preferred regions being targeted by investors. But the challenge will be to find the right product. For that reason I think we will also see more development taking place in the medium term.

PropertyEU: What is the remit of the CBRE Nordic Property Fund?
Eertink: The fund is just under €1 bn in terms of size, with two-thirds invested in Sweden and a third in Finland, of which the main part is concentrated on Helsinki. Around 70-80% of existing investments are in retail.

PropertyEU: Are you planning more funds?
Eertink: We’d like to expand beyond the three investment funds we have now towards a wider client base by growing the separate accounts business. The separate account model - with one to three equity providers investing in a single asset - is becoming increasingly popular. This is an area where we want to grow in the Nordics, particularly in the retail sector, from core all the way up to value add.

PropertyEU: Will investment be focussed on the capital cities only?
Eertink: Our focus will not only be on the capital cities but also on second-tier cities where we believe there is value to be added given the strong fundamentals. We will also look at office and logistics assets in dominant local markets, but here the focus will be on core/core-plus tickets. Average ticket sizes range from €50 mln to €150 mln depending on the type of investor.

PropertyEU: What experience did you gain from managing retail portfolios in the Netherlands?
Eertink: During my time at ING REIM, I was responsible for a couple of core/core-plus retail portfolios in the Netherlands. Key assets included De Koopgoot in Rotterdam, one of the country’s best performing assets with high footfall and a strong European tenant profile. I also let several retail redevelopment projects, the most rewarding of which was the Mercurius centre in Assen, which has been nominated the Best Shopping Centre of the Year in 2014 by the Dutch Council of Shopping Centres.

PropertyEU: How did you get involved with ICSC’s Next Generation Group?
Eertink: In 2007-2008, when I was still based in the Netherlands, the Dutch Council of Shopping Centres asked me and two other persons to set up a new generation group in Holland, which is still going strong. In late 2008 ICSC decided on a similar initiative at a European level. They asked Josip Kardun, COO at Atrium and former CIO of German retail developer ECE, to set this up and I was asked to represent the Dutch members as local chair. In early 2013 I was asked by Mike Morrissey, ICSC managing director, to take over as European chairman from Josip who had held the post for four years.

PropertyEU: What are its goals and why is it important?
Eertink: Next Generation is a separate platform within the global ICSC organisation of 65,000 members. It is aimed at top industry talent: members must have a passion for retail and really want to develop themselves. Mike Morrissey and Alexander Otto (chairman of the ICSC European Advisory Board, ed.) have made the group a strategic priority which gives us tremendous support at all kinds of levels, both internally and externally. We want to be an international add-on for young people who are mostly still in local careers by connecting them to the more senior ICSC network at a European and global level. The collective factor is very important to me; it’s not about me steering the group but about us together taking the platform to the next level.

PropertyEU: How does it operate?
Eertink: There are currently around 350 members from all over Europe representing different retail disciplines. We use social media a lot to stay in touch - e.g. we have a LinkedIn page - and we meet at events throughout Europe. Last year, we organised 10 events in seven countries and we’re looking at a similar number this year. There isn’t a strict age limit; I would say talent and attitude are more important than the age factor!

PropertyEU: What are your interests outside the office?
Eertink: As the young father of a Dutch family in the Nordics, this gives us the opportunity to experience a lot of new things. I also like to go to the gym and to run as well as prepare for or go to dinner/have drinks.

PropertyEU: What are your three favourite buildings in Europe?
1) Guggenheim Museum in Bilbao. At a project level it had significant budget overruns, but it has put the city on the international map.
2) Westfields White City in London, the most inspiring shopping centre in the EU.
3) The Rijksmuseum in Amsterdam, a story-telling building with a real soul.

PropertyEU: Who do you see as a role model for the real estate industry and why?
Eertink: There are several. I had the opportunity to get to know Alexander Otto during 2013 given our ICSC roles. Impressive to see how, as an entrepreneur, he expands his business around the globe. And he still combines that with investing a lot of time to inspire young people, which I experience within our ICSC Next Generation initiative.

PropertyEU: Where do you see yourself professionally in five years time?
Eertink: I have learned from past experience that it’s impossible to say - I just enjoy the journey!