NREP closes Nordic retail fund at €340 mln (DK)

Nordic Real Estate Partners (NREP) today announced the final closing of NREP Nordic Retail Fund 2, which is the sixth NREP fund. The fund will continue NREP’s retail value-add strategy, with which NREP has delivered steady income and capital appreciation for the last seven years despite turbulent markets. The fund will have a total investment capacity of around €340 mln, of which more than 25% has been committed.

The first closing took place in August 2012 and amounted to €121 mln, consisting of a group of nine Northern European institutional investors, among them JØP (The Pension Fund for Danish Lawyers and Economists), PBU (The Pension Fund of Early Childhood Teachers) and Talanx Group (German Insurance Group). In addition, NREP has co-invested, as in all prior NREP funds.

The second closing consisted primarily of first close investors, who wished to increase their commitment to the fund.

The fund has already made two acquisitions, one in Stockholm and one in Copenhagen, and is in the process of closing the two next, causing the fund to be more than 25% committed.

“We appreciate the strong support shown by our first close investors, making the second closing very efficient. We look forward to continue delivering strong risk adjusted returns with our focused value add investment strategy within the necessity-driven retail segment in the Nordics,” says Mikkel Bülow-Lehnsby, CEO, NREP.

NREP is expecting to deliver annual dividends of 7-10%, coupled with some capital appreciation driven by active asset management leading to an overall fund target IRR of 12-13%. This is achieved by acquiring well located food-anchored retail assets in strong growing Nordic cities with an attractive demographic outlook. Many of these assets will benefit from active hands-on asset management. The fund leverage is capped at 50%.

“Food and other necessity retail sales remain stable and growing in the Nordics, while other retail segments have lately shown larger volatility. This is why the risk-reward balance in the necessity driven retail segment continues to be favorable provided that you focus on right locations in growth regions, locally hand-pick the right assets and continuously work with the tenants to improve asset turnover,“ says Mikko Räsänen, partner in NREP.

Source: Nordic Real Estate Partners

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