NREP secures a first closing of EUR 121m for Nordic Retail Fund

Nordic Real Estate Partners (NREP) has announced the first closing of its Nordic Retail Fund 2, its sixth fund in the NREP series. The fund manager raised EUR 121 mln in the first closing from a group of nine Northern European institutional investors, including JØP (The Pension Fund for Danish Lawyers and Economists), PBU (The Pension Fund of Early Childhood Teachers) and Talanx Group (German Insurance Group). NREP is also co-investing in the fund.

NREP expects to deliver annual dividends of 7-10% and is targeting an overall IRR of 12-13% driven by capital appreciation through active asset management. NREP´s strategy is to acquire well-located food-anchored retail assets in strong growing Nordic cities with an attractive demographic outlook. NREP aims to have its second and final closing towards the end of the year and is targeting a total of EUR 200-250 mln, providing a total investment capacity of EUR 400-500 mln with 50% leverage.

The fund marks the continuation of NREP’s retail value add strategy, which NREP claims has delivered steady income and capital appreciation for the last seven years despite the turbulent markets. CEO Mikkel Bülow-Lehnsby said. 'We are grateful that the investor community is starting to notice the attractive risk-adjusted returns we have been able to produce with our focused value-add investment approach. We will do everything possible to ensure we keep living up to the trust investors are showing us.'

CIO Rasmus Nørgaard pointed out that food-driven retail consumption in the Nordics remains a stable sector. 'Historically we have been able to further enhance this risk-reward balance by working with our tenants to improve turnover and to improve tenant mix as well as the general property specifications. This has been possible as there are few focused owners in this segment in the Nordics.'

Nordic Real Estate Partners (NREP) focusses on value-add investment strategies and has to date primarily focused on modern logistics, necessity-driven retail, self-storage and to a lesser extent residential. NREP has raised EUR 500 mln for these strategies across six funds and has completed close to 100 transactions with a total value of EUR 1 bn. NREP employs over 30 professionals across its three offices in Copenhagen, Stockholm and Helsinki and is fully owned by its partners.