Baltic Property Trust to raise fifth fund

The Danish firm says it wants to take advantage of tumbling property prices in both the direct and indirect real estate markets in the Nordics.

Baltic Property Trust is poised to begin raising its fifth Nordic real estate fund. The vehicle will target real estate shares of companies listed in the Nordic countries as well as direct property being sold by distressed sellers.

The Copenhagen based fund manager, which was established in 2001, plans to raise a total of €100 million ($126.7 million) in equity over two closings: the first closing, targeting between €30 million and €60 million, is expected in early June, while the second closing is expected to occur in March 2010.

The fund is targeting an annual return of between 15 percent and 20 percent. It is also providing its investors with possible exits after 12 months and 48 months.

In a statement, the firm said the value of Nordic real estate companies had dropped by two thirds presenting ample investment opportunities for investment.

It said “sound cash-generating properties” had done likewise. “As investors have defaulted on their loans, properties have been taken over by financial institutions with limited capabilities and interest in administrating them. Furthermore, the impact of the current recession has paved the way for a downward pressure on rental levels resulting in a further pressure on property prices.