US financial services giant TIAA-CREF has entered the Nordic market with the acquisition of the Nova Lund shopping centre in Sweden from Unibail-Rodamco for SEK 1635 mln (€176 mln).

"US financial services giant TIAA-CREF has entered the Nordic market with the acquisition of the Nova Lund shopping centre in Sweden from Unibail-Rodamco for SEK 1635 mln (€176 mln).

TIAA-CREF, through its TH Real Estate arm, has exchanged contracts to acquire the 25,000 m2 retail scheme for a net initial yield of 5.5% and an average value per m2 of SEK 63,155 (€6,791).

David Turner, head of TIAA European Investment said the deal is just 'the first step in TIAA-CREF’s decision to invest in the Nordic region'. 'The market is identified as a key investment target within TIAA-CREF's European strategy. We particularly favour the retail sector for which we anticipate outperformance in sales growth, driven by population growth, positive consumer confidence and a stable economy.'

He added: 'TIAA-CREF’s intention is to become a long term investor in the region, forming strategic partnerships along the way.'

The institutional player has been investing in Europe for 20 years and it recently launched a European debt programme. In 2013, TIAA-CREF teamed up with German retail specialist Mfi to acquire the Gropius Passagen shopping centre in Berlin for €341 mln. In Germany it also owns Perlacher Einkaufsparadies, known as PEP, which is bought in 2011 for €415 mln, or a record low yield of 4.6%.

NOVA LUND
Constructed in 2002 by developer JM and sold to Unibail-Rodamco in the same year, Nova Lund has become one of Sweden’s best performing regional shopping centres over the past decade. Located in Lund (20 km northeast of Malmo), in the south of Sweden, it comprises a 19,847 m2 shopping centre, a 6,137 m2 adjacent complementary retail park and around 1500 parking spaces.

Following the acquisition of Nova Lund, TH Real Estate’s Nordic portfolio under management includes four shopping centres, four retail parks and one office.

'The city of Lund has one of the highest purchasing powers in Europe with a projected population increase over the long term,' said Johan Åström, TH Real Estate's head of Investment in Sweden, commenting on the deal. 'The centre will continue to benefit from the centre’s core characteristics, a stable cash flow and Sweden’s positive retail sales growth.'

The transaction is expected to close in Q3 2015.

TH Real Estate was advised by Linklaters and PwC. Unibail-Rodamco was advised by Cushman & Wakefield, Catella and Vinge.

For more on the Nordics see PropertyEU's latest investment briefing reports and videos on the region."