Teesland plc (LSE: TLD) has launched Nordic Aktiv ("the Fund"), an 850m fund investing in the four Nordic countries of Denmark, Sweden, Finland and Norway. The Fund will focus on acquiring high yielding mixed commercial properties with a strong emphasis on multi-let buildings. The target income return to investors is 8%.
Fifteen investment funds represented by seven investment management groups have committed a total of 258 million of equity at the first closing this week. Investors are predominately British life and pension funds and European fund of funds represented by Morley Fund Management Limited, Schroder Property Investment Management Limited, Henderson Indirect Property Fund (Europe), F&C Property Asset Management plc, BlackRock Investment Management, CBRE Investors and the Dutch real estate asset manager Achmea Vastgoed B.V.
A final closing early next year will take the total equity to 300 million, which together with debt provided by HBOS, will create an 850 million fund.
The funds raised will initially be used to acquire a 450 million (£305 million) seed portfolio assembled by Teesland iOG over the past nine months and held by Scarborough Continental Partners, a joint venture between the Scarborough Group and Bank of Scotland. The portfolio comprises 63 individual properties totalling 460,000 m² (4.95 million ft²) with 618 tenants across Sweden, Denmark and Finland.
Teesland iOG identified the Nordic region as offering good investment prospects some twelve months ago. Its particular attributes are its strong and growing economics, the size and transparency of the market and the comparatively high yield. Teesland is targeting an IRR of 12-14% for the Fund. The Company expects to achieve this through its specialist on the ground asset management approach implemented through its offices in Malmo and Stockholm, with a combined staff of 38, and its local partners in Oslo and Helsinki.
Paul Oliver, a director of Teesland, commented: "The speed with which we were able to raise these funds is a strong endorsement of our investment strategy, the quality of our seed portfolio and also the track record we have achieved to date in Europe where funds such as our EHI Fund have shown excellent performance.
"The Nordic Aktiv team is exceptionally strong with David Seddon, CIO Europe, leading fund strategy and management and Michael Bruhn, Managing Director of Teesland Nordic, responsible for acquisition and leading a 34 strong asset management team across the region."