Aberdeen Property Investors expands into Russia

Aberdeen Property Investors, the Sweden based property division of Aberdeen Asset Management, joins the rush into Russia by opening an office in St Petersburg and raising its inaugural Russia fund.

Aberdeen Property Investors is hiring a team and opening an office in St. Petersburg, Russia’s “second city”, as part of a push into the region.

The firm, which manages a number of unlisted real estate funds, has poached a team from Baltic Property Trust, a regional fund manager, to spearhead the drive into Russia as it raises money for its first Russia focused fund.

Ole Dall-Hansen, previously director of fund raising and investor relations at Baltic Property Trust, is heading the team. It will work alongside existing Aberdeen investment managers, based in Finland, who have already been conducting in-depth research with a view to expanding into the Russian market.

Aberdeen is currently finalising plans to launch a Russian direct property fund for institutional investors seeking opportunistic exposure with the potential for higher returns. It will be a diversified fund investing in commercial property.

Rickard Backlund, chief executive, said in a statement: “Local active management is core to our business and our decision to open an office in St. Petersburg reflects our belief in the long term potential of the Russian property market. We are now building a strong team to find interesting transactions for investors and to actively manage properties in this market.”

Ubbe Strihagen, international director, said the firm has spent the last 12 months preparing for expansion into Russia and is in the final stages of structuring its first Russian fund, which is expected to be up and running during the third quarter of the year.

“Russia is a fast growing economy with strong GDP growth. At the same time, Russian property is underdeveloped with large potential for property investments,” added Strihagen.

He said demand for office space is steadily increasing and a rising personal income has provided the retail sector with a period of strong growth.

Earlier this month, Aberdeen Property Investors announced the fourth closing of the Aberdeen Property Fund SICAV Pan-Nordic, which has raised a further €125 million ($166 million) from British and French institutions as well as Norwegian investors.

The fund, which had its first closing in October 2006, has now raised a total of approximately €370 million in equity from domestic and international investors.