Aberdeen Property Investors has successfully conducted the first closing of its second Norwegian fund, API Eiendomsfond Norge II ASA, having raised NOK 298 m in equity from investors in just a month. With the planned gearing of 75%, the fund now has a committed capital for new property investment of approx NOK 1 200 m (approx €150 million).
Based on the strong demand, the fund will conduct a second closing with signing during the period of Nov 18 Dec 14. After this period, the fund plans to have quarterly closing for new investments into the fund.
"We will target a similar investment inflow all through 2006 which will create a property portfolio of 600 750 million. This is an ideal size for risk diversification and enables the fund to look at the largest transactions in Norway", comments Espen Klevmark, Managing Director Norway, Aberdeen Property Investors.
The fund will be managed as a discretionary fund and will be built up using Aberdeen's local expertise in the Norwegian property market. It will consist of an actively managed portfolio, well diversified across different property types, regions and tenant categories.
The target return for the fund is above 12 % per year after taxes and charges. Expected annual payout is 5-9 %. The fund is a closed ended fund with a 10 year life span.
"Property in Norway is expected to show a continuously high total return, in comparison with Europe. A well diversified property fund could therefore be an attractive alternative to investors in the future, along with stocks and bonds", said Ubbe Strihagen, International Director Aberdeen Property Investors.
Aberdeen's first Norwegian fund achieved a total return of 29.6% (geared) and 15.4% (ungeared) in its first year and was closed for additional investments in September 2005.
Source: Aberdeen Property Investors