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The acquisition of one of the largest shopping centres in Sweden is an important step for Grosvenor Fund Management in the creation of a pan-Nordic retail platform, CEO James Raynor tells PropertyEU.

In mid-January Grosvenor FM announced it was acquiring Skärholmen Centrum, a 98,000 m2 shopping centre with 175 retailers in southwest Stockholm. It is ranked as one of the country's top four shopping centres by footfall, with 14 million visitors a year. The investment volume was not disclosed but is believed to have been in the vicinity of €350 mln.

PropertyEU asked Grosvenor FM CEO James Raynor about the deal and how it fits into the investor's strategy.

PropertyEU:What attracted you to Skärholmen Centrum?

Raynor: This is a fantastic deal for us. Skärholmen Centrum's 'exceptional' community facilities, which include a library, health service and schools, set it apart as more than a shopping centre. This makes it an outstanding social hub for the local catchment area of more than 600,000 people. Every time I have been there the centre is humming and we think by making it even more interesting we can expand the catchment area. There are really interesting asset management angles that will help achieve that. The vendor has done a good job in the last few years in terms of starting the process and we will continue that.

PropertyEU: You must have faced a lot of competition. How did Grosvenor FM emerge ahead of the pack?

Raynor: We were not necessarily the highest bidder but the one in which the vendor had the most confidence. It definitely helped that we have been in the market since 2011 and have a local team on the ground.

CBRE marketed Skärholmen Centrum for the vendor in an open process. There was a tight timescale but we had been tracking the centre for quite some time so we were prepared to get going fast. Shopping centres are living animals with a lot of things that move and change, yet we were able to do all our analysis in a couple of months. We try to work incredibly fast up front to get to a position of certainty very quickly. Everything was as we thought it would be: we were able to do the analysis and place the debt required quickly. The process was tight and sometimes tense but ultimately it worked very well.

PropertyEU You made the decision to set up in Sweden back in 2011 by acquiring four retail properties in Sweden from Unibail-Rodamco for SEK 2.4 bn (then €268 mln). Why there?

Raynor: For some people it may not have been an obvious decision. Individually, the countries in the Nordics are relatively small, and some people might have asked at the time why we didn't go to Germany instead.

In our minds, Sweden was the first step towards developing a Nordic platform and bringing an international prospective to the market. We really liked the fundamentals in Sweden and felt that there was a real opportunity to become a leading platform there. Whilst we are an international company we operate locally. And, we felt as well that there were a lot of fund managers who work in Germany and France while Sweden was fairly domestically focused.

Sweden retail benefits from good GDP per head and generally good levels of wealth. The underlying economy and structure of the market with relatively short lease profiles compliments our abilities to take skills from other markets and put them in play here, allowing us to approach the market in a long-term but very active way.

PropertyEU:What's the next move?

Raynor: Following the initial transaction, the acquisition of a centre in Malmo and Skärholmen Centrum we now have six centres in Sweden and we would like to expand our market position and team further. It doesn't have to be in the top two cities (Stockholm and Malmo) or a particularly large lot size. We will look at things on a very asset-specific basis. Our position in Sweden is strong and we are becoming a recognised player. We can offer investor management services in a manner that few of our competitors can.

PropertyEU:When will you move into the rest of the Nordics?

Raynor: We haven't set ourselves a timetable but we have always said that Sweden was the first step, and if we could find compelling rationale to expand into Denmark, potentially Finland and Norway then we would do so.

We are quite interested in a couple of things in Denmark and we will see where that leads. Norway is probably lower down on our list at the moment. One of our advantages as a company is that we take a long-term view of things, so whether we act in six months or three years we will act for the right reasons.

Lot size is not an issue. Our decisions are driven by what we can derive from a potential investment - you can have a very good €50 mln investment just as you can from a €200 mln one. Therefore, our broad portfolio across Europe includes a number of assets that are relatively small.