Varma has invested in a Swedish retail asset with CapMan Nordic Real Estate Fund and Cavendo.

The €41.2bn Finnish pensions insurer bought the Heron City in a joint deal worth SEK930m (€97.3m).

The 49,400sqm shopping centre is in Kungens Kurva district, south of Stockholm, home to the largest IKEA store in the world, the joint-venture investors said.

Ilkka Tomperi, Varma’s investment director in charge of real estate investment, said: “With the excellent and continually improving retail dynamics in the Kungens Kurva area, we are excited to be increasing our retail exposure to southern Stockholm.”

Varma had recently been actively pursuing opportunities to expand its international diversification, he said.

Last October, Varma sold half its stake in logistics and industrial property investment company Certeum as a way of divesting some of its Finnish exposure.

“Real estate fits well into our wider investment portfolio and our recent international investments across Western Europe have performed well, benefiting from the good underlying fundamentals of many of these growing markets,” Tomperi said.

Varma has a total real estate portfolio of €3.8bn.

The shopping centre’s main tenants include the largest cinema in Sweden, operated by SF Bio, home electronics retailer Media Markt, interior design and furniture retailer Mio, Willys supermarket and sports and outdoor retailer XXL, the investors said.

Over the next few years, they said, access to the centre is set to improve significantly with the completion of Stockholm Bypass, a series of underground motorway tunnels.

Ed Williams, senior partner at CapMan Real Estate, said Heron City was a good fit with the asset manager’s value-add strategy.

Cavendo will take responsibility for asset management at the centre, he said.

At Cavendo, managing director Joakim Karlsson said: “Heron City is a property with strong fundamentals, which at the same time offers value-add opportunities through active asset management, which fits perfectly with Cavendo’s investment philosophy.”