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SWEDEN - Aberdeen has radically reduced its exposure to Swedish retail, just weeks after the 2007  Swedish Annual Property Index claimed it as the year's top-performing sector.

Marc Pamin, manager of Aberdeen's Nordic Fund I, told Â鶹ӳ»­ Real Estate the fund had switched part of its €50m retail allocation t0 logistics because of retail's regionally low growth rates.  He cited a decline in consumer spending was one of the main reasons for the trend.

"Our in-house research showed growth rates for warehousing were significantly higher," he said. "After internal discussions, we decided to adapt the strategy for the fund."

According to a recently-published Jones Lang Lasalle report, Swedish logistics transaction volumes remained robust last year at €1.78bn.

Pamin's comments came at the same time as the fund acquired a logistics and distribution centre south of Jönköping for the fund. The acquisition represents a net initial yield of 6.1%.

But among those still bullish on Swedish retail is Andrew Allen, head of research and strategy at Cordea Savills, who recently told Â鶹ӳ»­ Real Estate retail would "continue its strong performance". Allen cited GDP and rental growth as drivers, as well as the potential for upgrading dated shopping centres.

With equity of € 170m, Aberdeen's Nordic fund targets German institutional investors, including pension funds.

The firm last week completed its €110m acquisition of German fund manager DEGI from Dresdner Bank in a deal designed to strengthen Aberdeen in the "strategically important" German market.

Aberdeen's corporate acquisition strategy targets "in-fill" businesses that expand its geographic reach and product portfolio.