Cordea Savills, the international property fund manager, is launching the Cordea Savills Nordic Retail Fund, a Luxembourg investment vehicle. The fund will offer institutional investors exposure to the retail sector in the growth region of the Nordic countries (Sweden, Finland, Norway and Denmark) and the Baltic States (Estonia, Latvia and Lithuania). This region offers favourable economic and investment characteristics where attractive risk-adjusted returns with a high income distribution and strong capital gains can be achieved from retail property investment.
With a target size in excess of 500 mln., the fund will target a total return of 10% per annum over its 10-year life. A seed portfolio of five assets has been purchased for c. 150 mln. The assets are a dominant and modern retail warehouse in Skelleftea, Sweden and one district and two neighbourhood shopping centers as well as an automall in the Helsinki Metropolitan area. All four of the Helsinki assets are prominently placed in highly populated areas with strong transport links.
The fund launch follows the recent establishment of Cordea Savills' Stockholm office as part of its expanding European infrastructure, and the key appointments of Håkan Blixt, Olle Hällfors and Johan Eliasson. The new office has responsibility for the Nordic region and the Baltic states, both in terms of property investment activities and servicing local clients.
Justin O'Connor, Chief Executive Officer of Cordea Savills, commented, "We have assembled a top rate team for the Nordic Retail Fund. The purchase of the seed portfolio not only demonstrates our ability to source attractive deals in this market but also provides a solid investment base for the fund."
The fund, which will focus on shopping centres and retail warehouses, is positioned to benefit from growing demand from domestic and international retailers in the Nordic countries, together with an affluent population with strong purchasing power. The Baltic region, whilst small, is showing rapid economic growth and consumer spending levels are surging. The development of the Baltic retail markets has been rapid, accelerated by strong connections with their Nordic neighbours. With high demand for limited stock, vacancies are low and rents are rising.
Håkan Blixt, Portfolio Manager of the fund, commented: "Our focus is on shopping centres and retail warehouses where we can add value and benefit from increased income distribution and strong capital growth. Older shopping centres or 'first generation' retail warehousing, where we can reposition assets and improve the retail offer, are of particular interest."
Source: Cordea Savills