Ilmarinen’s real estate outshines other sectors

Despite posting a loss of $5.46 billion for 2008, the Finnish pension fund sees real estate outperform its other investment sectors.

Finnish pension fund Ilmarinen saw its real estate investments outperform all of its other investment sectors in 2008, although the fund reported an overall loss of €4.34 billion ($5.46 billion) for the year.

According to reports, Ilmarinen saw the value of its real estate portfolio rise by 15.9 percent to €2.5 billion over the year as it provided an overall return of 6.8 percent. The pension fund owns a portfolio including more than 4,500 homes and about 70 offices and warehouses totaling 860,000 square meters.

Ilmarinen’s real estate return in 2008 was driven primarily by the 8.3 percent yield on its directly-owned properties, while its indirect real estate investments, which account for about 12 percent of the fund’s allocation to real estate, produced -5.2 percent.

Overall the fund saw the total value of its investments fell from €23.66bn in 2007 to €20.87bn in 2008, as it posted an investment return of -17.7 percent following the financial crisis.

As a limited partner in real estate funds, Ilmarinen has previously invested in value added funds run by managers such as Aberdeen Property Investors and AXA REIM.