Cordea Savills, the international property fund manager, is adding further to its suite of products with a Nordic Retail Fund.
The Luxembourg registered vehicle has a target size in excess of €500 million ($712 million) to invest in Sweden, Finland, Norway and Denmark as well as the Baltic States of Estonia, Latvia and Lithuania.
The firm said it is aiming for annual total returns of 10 percent over its 10-year life span and it to be seeded with a portfolio of five assets acquired for approximately €150 million ($213 million).
The assets are retail warehouse in Skelleftea, Sweden and one district and two neighbourhood shopping centres as well as an automall in the Helsinki metropolitan area.
The fund launch follows the opening of Cordea Savills’ Stockholm office as part of its expanding European infrastructure.
New recruits Håkan Blixt, Olle Hällfors and Johan Eliasson have responsibility for the Nordic region and the Baltic states, both in terms of property investment activities and servicing local clients.
Justin O’Connor, chief executive officer of the firm said in a statement, “We have assembled a top rate team for the Nordic Retail Fund.”
The strategy is to capture growing demand from domestic and international retailers in the Nordic countries, together with the region’s “affluent population.” The Baltic region, whilst small, is showing rapid economic growth and consumer spending levels are surging, according to the firm. “The development of the Baltic retail markets has been rapid, accelerated by strong connections with their Nordic neighbours. With high demand for limited stock, vacancies are low and rents are rising,” they added.
Blixt, portfolio manager of the fund, said: “Our focus is on shopping centres and retail warehouses where we can add value and benefit from increased income distribution and strong capital growth. Older shopping centres or ‘first generation’ retail warehousing, where we can reposition assets and improve the retail offer, are of particular interest.”
Cordea Savills manages around €4.2 billion of gross assets for a range of clients including pension funds, charities and private investors.
It currently manages a Student Hall fund in the UK which is busy acquiring student accommodation, as well as a serviced land fund, a German retail fund, and an Italian opportunities fund. It added to the suite with recently launched UK Property Ventures No.1 fund aiming to raise £200 million to invest in land that is allocated for development by local authorities, or unallocated land that has the potential for future development for housing or other uses.