Q4 DEALS: Norway revels in new role as deal venue

Foreign investors lined up to acquire the best real estate assets in the Nordics last year, significantly boosting the region's aggregate volume.

TOP NORDIC DEALS
Q4 2015

1. Meyer Bergman-led JV buys Oslo retail portfolio for €554m
2. Klépierre, Entra scoop DNB's Oslo City complex in €528m deal
3. Swedish pension fund invests €350m in new Norwegian real estate JV
4. Coller captures largest Danish property investment deal so far in 2015
5. Blackstone takes majority stake in €900m of Finnish logistics
6. Savills sells €172m Oslo hotel at record low yield
7. Tristan opp fund picks up Norwegian retail portfolio for €136m
8. Blackstone fund invests €100m in logistics at Helsinki sea port
9. Sweden's AP 1 forms Finnish JV with grocery retailer
10. Sweden's Ratos enters Finland with €191m retail property JV

Source: PropertyEU Research
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Karsten Kallevig, head of real estate at Norway Global Pension Fund Global, went on record recently to bemoan the difficulty of finding and accessing suitable big tickets to move closer to the 'sovereign wealth fund's goal of having 5% of its holdings invested in real estate in international markets.

Up until recently most international real estate investors would have said it was equally difficult to find and acquire real estate of a significant size in the Norwegian market. For several years cross-border investment in Nordic real estate has really focussed on Sweden and the small Finish market, and to a much lesser extent, Denmark.

This changed drastically in 2015. A flood of big-ticket deals generated a full-year volume of €12.7 bn for Norway, compared to €6.1 bn the year before, according to a report by Pangea Property Partners. Norway accounted for 32% of the 2015 aggregate volume of €39.4 bn for the Nordic region, up from just over 20%, or €6.1 bn, in 2014.

The Nordic volume of €39 bn was a 36% increase on the 2014 volume of 28.9 bn in 2014.

Sweden - traditionally the most liquid market - has managed to retain its top position despite the surge of deals in Norway. Pangea recorded a volume of €15.5 bn for Sweden in 2015, or 39% of the Nordic volume. However, the Swedish volume was 3% down on 2014. Finland saw €5.2 bn of property trading in 2015, its second best performance ever, while Denmark was 107% up on 2014 with €6 bn of assets changing hands last year.

Norwegian retail
Norwegian retail property attracted three of the largest investments by volume in Q4, data analysed by PropertyEU Reseach shows. At the beginning of the review period pan-European retail property investor Meyer Bergman agreed to purchase a portfolio of 11 prime properties in central Oslo’s principal shopping district for NOK 5.3 bn (€554 mln).

Meyer Berman was acting for one of its funds and clients. 'This is a signature high street investment for us,' said Markus Meijer, CEO of Meyer Bergman. 'The luxury retail offer in Oslo is still quite limited for a city with such a wealthy and growing population, which is why we see plenty of scope to add value to these assets for our investors.'

On 14 December Steen & Strøm - the Nordic unit of Paris-based retail property REIT Klépierre - teamed up with Norwegian office investor Entra to acquire the Oslo City office complex for €528 mln. Located in Oslo’s main transportation hub, Oslo City has the highest footfall in Norway. It covers a total of 33,000 m2 of retail space and 34,000 m2 of office space as well as 340 parking spaces.

Retail is also popular outside of Oslo. Tristan Capital Partners's Episo 3 opportunity fund acquired five retail parks and four development sites in Norway for NOK 1.2 bn (€136 mln) in November.

Episo 3 carried out the transaction in a joint venture with local operating partners FG Eiendom and Malling & Co Eiendomskapital. The portfolio comprises 92,300 m2 of retail warehouse space located at parks in five locations across Norway.

Swedish pension fund AMF has also targeted Oslo as part of its expansion into neighbouring countries. In October AMF paid SEK 3.3 bn (€350 mln) for a half share in Oslo Areal, owner of 250,000 m2 of commercial real estate in Norway. The investment creates a 50:50 joint venture with Norwegian insurer Gjensidige Forsikring to own Oslo Areal. The insurer used its Oslo Areal unit to own, manage and develop real estate investments. The current €700 mln portfolio comprises 21 properties, mainly office building located at hubs in and around the Norwegian capital.