UK/NORDICS - A group of large Nordic and UK institutional investors have invested in a new logistics real estate fund offered by Nordic Real Estate Partners, which will invest in Nordic logistics properties.
The institutional investors include SPP Livförsäkring, a Swedish life and pensions provider represented by Storebrand Eiendom - the property arm of Norway's Storebrand insurer which owns SPP - Vattenfall Pensionsstiftelse, the pension fund of the Swedish water and utilities company, investors managed by Schroders Property Investment Management as well as a number of UK pension funds represented by CBRE Investors Global MultiManager.
Tomas Svensson, CIO of Storebrand Eiendom in Sweden, said logistics real estate, which is often characterised by long-term rental contracts and steady rent-levels, makes an interesting segment for the SPP custom-base and because the stable returns are a good match against SPP's liabilities.
He added another important factor in the NREP fund is it will invest in properties considered to be well-positioned in terms of transportation, as this is expected to reduce CO2 emissions.
"The goal is to enable transport through shipping and rail as far as possible because this is an environmentally-friendly complement to road transport," said Svensson.
SPP is building its property portfolio to represent 8-12%, equivalent of SEK7-10bn (€710m-€1.02bn), of total assets.
Aside from investing SEK750mn in the NREP logistics fund, SPP has also invested SEK500mn in Handelsbodarna i Sverige Fastighets AB, a joint venture with the property arm of KF - The Swedish Co-operative Union, which focuses on properties containing food retailing space.
SPP's committed capital of SEK1.25bn should be fully invested within three years, Svensson noted.
"SPP's real estate portfolio currently includes three property funds, two in Europe and one in Asia. The long-term goal for international exposure is somewhere between 10-20%, which means that we are currently not looking to add to our international investments," he said
The new NREP logistics fund is the fourth Nordic fund offered by NREP and is now closed, having raised SEK1.6bn from institutions.
The fund has been set up as a club structure containing the main investors and will have an investment capacity of approximately SEK3.5-4bn. At least SEK900m has been invested into a seed portfolio acquired simultaneously with the closing of the fund, comprising 160,000sqm of prime logistics properties in Sweden and Finland.
The fund launch is in line with NREP's strategy of focusing on niche investments in areas where the company can build a strong market position.
Mikkel Bülow-Lehnsby, partner in NREP, said: "We are very pleased and grateful for our continued ability to raise capital, despite the turbulent times. It gives us confidence that our model of working with narrow and focused investment strategies, in which we can acquire expertise, does not only make sense to us but also to the investor community."
NREP has a staff of over 25 professionals combining experience from international blue-chip real estate, investment banking and management consulting with offices in Finland, Denmark and Sweden, to focus on the modern logistics, self-storage and value-added retail sectors.
NREP has raised four funds since its inception with a total equity value of approximately €350m, primarily from large Nordic and international institutions, and now manages assets worth €400m, with the investment capacity for another €500m.