Nordic investors pumped €775 mln into the German real estate market in 2016, an increase of 65% on the previous year and up from just €97.9 mln in 2010, according to Savills.
At the turn of the year, Finnish pension funds Varma and Elo announced they were joining forces with Qatari sovereign wealth fund Qatar Investment Authority (QIA) and US investor-developer Tishman Speyer to acquire the TaunusTurm complex in Frankfurt’s banking district for an estimated €650 mln. For private Finnish pension fund, Elo, which manages a €2.7 bn property portfolio, the deal marked its first single-asset transaction outside the Nordic market.
‘There has been a lot of interest from Norwegian, Danish, Swedish and Finnish pension funds in European real estate in recent months,’ said Florian Reiff, senior managing director and regional director for Tishman Speyer’s German portfolio. ‘Germany is one of their target markets because it is a natural fit and is expected to remain a strong market despite uncertainty in the euro zone. Also, Germany is not far away, geographically speaking.’
Varma has significantly boosted its exposure to real estate outside its home market in the past three years. Today, around 15% of its €3.7 bn real estate portfolio is outside Finland, up from just 5% three years ago.
Another investor which has been very active is Norway’s Norges Bank Investment Management (NBIM) which acquired around €700 mln of real estate assets in Germany between 2009 and 2016, according to Savills.
NBIM acquired a 50% stake in a logistics portfolio comprising eight buildings and developable land in Poland, the Czech Republic and Hungary in a joint venture with Prologis last October. NBIM paid €55.3 mln for its 50% stake. The portfolio included eight buildings with a total volume of 148,000 m2 and land with development potential of 173,000 square meters. The properties are located in Wroclaw, Prague and Budapest.
NBIM deployed NOK44 bn (€4.85 bn) on behalf of the state pension scheme Norwegian Pension Fund Global in 2015, up from NOK36.7 bn a year earlier, a company spokesperson said. ‘At the moment, 3.1% of the portfolio is invested in real estate. The goal is for that to be 5%, although no time frame has been set.’
Danish pension fund ATP Group did not invest in Germany last year, although it acquired the Waterfront shopping centre in Bremen for €215 mln in August 2015 from Resolution Property and LNC Property Group. The deal marked the group's first investment in a shopping centre outside Denmark. ATP holds a 95% stake, with Germany’s ECE taking the remaining 5% stake.
