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Copenhagen-based Baltic Property Trust, the largest commercial real estate investor in the Baltic Sea region, has said its new Nordic fund will start acquiring assets in the ‘ocean of opportunities’ in Denmark, Finland, Norway and Sweden from June this year. The closed-end, unlisted BPT Nordic Opportunity fund will have a wide remit to acquire equity, direct property and distressed debt.

Bent Kristensen, senior portfolio manager at BPT, told PropertyEU that the fund size would initially be at least EUR 30 mln, rising to EUR 100 mln by February 2010. Offering the possibility to exit after 12 or 48 months, the fund has a target annual return on investment of at least 15-20%. The investors are mainly pension and life insurance firms and high net worth individuals. Most are based in the Nordics, but the fund has also attracted investment from Switzerland and Luxembourg. Kristensen said gearing for the fund can be as high as 50% of gross asset value but would probably be lower initially.

Kristenen said that the value of listed property firms had dropped by two thirds and the value of ‘sound cash-generating properties’ had also nosedived over the last 12 months. ‘This will generate great opportunities for the fund, including unique opportunities to obtain distressed properties being sold by banks,’ Kristenen said. Denmark and Norway are ahead of the cycle, he said, though there are also distressed situations in Sweden and Finland but to firm’s taking on too much leverage in recent years.