Another Strong Year for Nordic-Focused Private Real Estate Fundraising – February 2016

by Abbie Smith

  • 10 Feb 2016
  • RE

Preqin’s Real Estate Online profiles 54 Nordic-focused private real estate funds that have closed since 2010, cumulatively raising an aggregate €10.7bn. Although investment in the Nordic region is typically incorporated in pan-European investment mandates, 39 of these vehicles focus solely on the Nordic region, having raised €5.6bn in institutional capital commitments.

Over the last decade, Nordic-focused fundraising has grown considerably, most likely due to the relative safety of these wealthy economies compared with the less stable economies of southern Europe. In 2011, only five funds closed – raising €1bn – whereas 2014 saw 11 vehicles reach a final close securing more than three-times as much capital (€3.5bn). Key players have contributed to the growth in fundraising over recent years: in 2014, UK-based Tristan Capital Partners reached a final close for their vehicle, European Property Investors Special Opportunities 3, at €950mn; while Nordic Real Estate Partners (NREP) secured €400mn for NREP Nordic Strategies Fund, which targets investment in modern logistics, necessity-anchored retail and residential properties in large and established growing Nordic cities, replicating the strategies of previous NREP funds. Last year, Sweden-headquartered Niam raised the second largest solely Nordic-focused fund in the period 2010-2016, securing €800mn for Niam Nordic VI, an opportunistic real estate fund targeting commercial and residential property investments in Sweden, Norway, Finland and Denmark.

At the beginning of February 2016, there were 12 private real estate funds in market with at least a partial focus on the Nordic region, targeting €4.2bn, including seven that focused exclusively on the Nordic region. Half of the funds with at least a partial Nordic focus target Denmark, including the largest fund in market, Meyer Bergman European Retail Partners III, which is currently targeting €900mn. The largest exclusively Nordic-focused fund in market is NREP Nordic Strategies Fund II, targeting €500mn, following on from the success of its predecessor fund in 2014.

Fundraising success over recent years has motivated private real estate fund managers to focus on Nordic property markets and to consider solely Nordic-focused fund exposure. In 2015, 64% of Nordic-focused funds met or exceeded their target size, justifying the increasing interest in the region’s property markets.

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