Nordic-Based Investors in Private Real Estate – July 2015

by Lauren Mason

  • 07 Jul 2015
  • RE

Given their relatively stable political landscapes, highly developed economies and mature real estate markets, the Nordic* countries are generally perceived as favourable investment destinations within Europe. These conditions are conducive for developing sophisticated investors in the real estate asset class; Preqin’s Real Estate Online tracks 164 of these institutions based in the region. Total assets under management for these investors amount to $2.8tn, which is a sizeable proportion (11%) of the total assets under management of Europe-based private real estate investors.

As expected, the majority (80%) of Nordic-based investors in real estate have a preference for Europe-focused real estate. Additionally, over half of Nordic-based investors (55%) will invest domestically. North America, Asia and Rest of World are fairly equal as geographical targets for investment, with 33%, 37% and 39% of Nordic-based investors stating a preference for these regions respectively, and only 23% investing in vehicles with a global focus.

Direct investment in the asset class is the most favoured route to market for Nordic-based investors, with 74% stating it as a way they access real estate, while private real estate funds are also utilized by a large proportion of investors (69%). Comparatively, only 11% of Nordic-based investors invest in real estate through listed securities.

In terms of strategy, Nordic-based private real estate investors invest through a mix of fund types, reflecting a strong balance between stability and risk, and indicating the sophistication of these investors to comfortably undertake a wide scope of strategies. Sixty-eight percent of Nordic-based private real estate investors target value added vehicles, closely followed by core vehicles (65%), opportunistic funds (57%) and core-plus vehicles (54%).

*Preqin defines the Nordic region as Denmark, Finland, Norway, Greenland, Iceland and Sweden.

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