A growing number of international investors are showing appetite for the Nordics, David Turner, director of property at Henderson Global Investors, told PropertyEU at the Mipim fair in Cannes.
A growing number of international investors are showing appetite for the Nordics, David Turner, director of property at Henderson Global Investors, told PropertyEU at the Mipim fair in Cannes.
‘We’re seeing a mix of foreign investors from the US and Asia but also Germany. Local investors tend to focus on offices, but foreign investors have a strong emphasis on retail,’ Turner said.
Henderson’s retail team has capital to invest in the Nordics via Henderson’s alliance with German partner Warburg. Warburg-Henderson’s Swedish Retail Fund, which is targeting a fund size of €300 mln and an average IRR of 7%, will invest in established and dominant retail properties in the Nordics in the core to core plus segment.
The investment focus is on Sweden (70%) which is the largest country in the region, while Finland and Denmark account for the remainder. ‘We want to be sure we can deliver results to investors,’ Turner said. ‘Sweden is by far the biggest and most liquid market. Norway is a very domestic market; we are not focusing our attention there.’
Turner is keen to step up activities in the Nordics in other ways as well and sees potential to raise capital for the region through a new pan-European retail fund or other types of investment vehicles. ‘We’re looking to raise additional capital through Warburg-Henderson and our pan-European platform. We know investors are thinking about the Nordics; the region is definitely on the radar and not just a thought.’
The investment drive will also be opportunity-driven, noted Johan Åström, head of property Sweden. ‘If necessary, we will buy first and find the capital afterwards.’ Henderson’s German platform is also a model for the future development of its Nordic business, he added. ‘We see a partnership where we can work together as a sign of the future.’
In the run-up to the financial crisis, Sweden became something of a hotspot, but the market has cooled down significantly since then, Turner said. ‘At the peak in 2007, it was a different market, with really keen yields of 4% or even keener. That is not the situation now. Buyers are more sophisticated and not over-geared. Average LTVs are 50%. Not everything is being sold and some assets are overpriced, but we are very selective and only go for the best product. And there are not any signs that the market is overheated, the risk-return-adjusted profile is very good and is similar to Germany’s.’
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