Standard Life enters Swedish property market (SE/UK)

Standard Life Investments has announced that it has made its first acquisitions in the Swedish property market as part of a further €35.5 million strengthening of its European Property Growth Fund (EPGF).

The first property is located in Gävle, north of Stockholm, and comprises a terrace of four retail warehouse units. The building totals approximately 4,073 m² of lettable retail area on a site of 21,370 m². Construction of an additional three units totalling 3,770 m² will commence during the second half of 2007 with completion scheduled for mid-February 2008. The extension is pre-leased to three tenants on long leases, all of which are national retailers.

EPGF's second Swedish acquisition comprises a terrace of eight retail warehouse units located in Västerås, a city to the west of Stockholm. The building totals 5,621 m² of lettable retail area on a site of 25,582 m². Occupied by tenants on long leases, the property is let to a number of good quality national retailers including Government-owned enterprises.

In February, Standard Life Investments announced that EPFG had committed at total of €91 million with acquisitions in Germany, the Czech Republic and Hungary.

Will Fulton, Manager of the European Property Growth Fund, Standard Life Investments, said, "This is Standard Life Investments first entry into the Swedish market, a market rated 'Heavy' by our Houseview, and is very much in line with the strategy of the European Property Growth Fund. I'm therefore delighted to have added both these acquisitions to our portfolio.

"Gävle is a busy city on the Baltic Sea, where the economy is being driven by key sectors such as manufacturing, distribution and retail. Our newly acquired site sits in a prime location just south of Gävle and strategically located next to the E4 Stockholm motorway. With high quality tenants and encouraging footfall, its prospects look very good indeed. The Västerås acquisition is part of the Erikslund Retail Park and is located adjacent to the E18 motorway connecting Oslo and Stockholm. Supported by a similarly buoyant economy and situated in a prime location, this purchase will make a valuable addition to the portfolio.

"With good locations, good properties and good tenants available, the Nordic region represents a key strategic market for the fund and I'm looking forward to announcing similar acquisitions in the near future, particularly in Sweden and Finland."

For the 12 months to 31 March 2007, the European Property Growth Fund returned 25.9% (Source: Standard Life Investments, net of all fees).

In October 2002 Standard Life Investments successfully closed EPGF, exceeding its original target and resulting in a total geared fund size of €300 million. EPGF was restructured in June 2005 principally due to demand from existing partners to extend the life of the fund and give it greater flexibility.

The fund was also expanded to allow access to new investors and was heavily oversubscribed at its new close. As a result, it moved from a closed-ended, finite life structured fund to an innovative open-ended unitised structure. Once fully invested and 50% geared, EPGF will have a fund size well in excess of €800 million. The current value of the fund is just over €600 million.

The objective of the fund is to invest in a high quality diversified portfolio of commercial properties across Europe, with a focus on mature, developed Eurozone markets. The fund invests predominantly in the office, industrial/logistics and retail sectors with a view to maximising capital growth by active asset management.

Source: Standard Life Investments

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