Nordic Real Estate Partners (NREP), the Copenhagen-based real estate investment manager, has launched a hybrid fund which has characteristics of both open and closed-ended funds for investments in Nordic logistics markets. It has been seeded with money from German, Swedish and Danish institutional investors.
The vehicle, NREP Logistics Property Fund, has attracted pension fund investment from firms including Denmark’s PFA Pension and Sweden’s AP1. German institutional firms Allianz and Helaba have also made commitments to the fund.
To kick-start the vehicle, NREP has seeded it with a portfolio of 49 logistics assets, totaling more than 11 million square feet. The portfolio’s assets, which are valued at €1.1 billion, have an average weighted lease term of more than eight years and are home to a number of blue-chip tenants.
NREP described the fund as a ‘hybrid’ of traditional open-ended and closed-ended platforms, which will see investors offered a ‘redemption window’ every five years. The firm also said the fund did not have a set target or hard cap, but would continue to accept commitments from new investors as part of an “ongoing process”.
NREP said it was launching the long-term vehicle to capitalize on investor interest in Nordics logistics and to benefit from scale.
“There is a very clear benefit of having operational scale, as far as logistics are concerned. From that perspective, you can diversify your risk by having a sizeable portfolio from day one,” said Gustaf Lilliehook, head of investor relations at NREP.
Lilliehook added that the Nordics region had been largely overlooked by many of the larger European-focused platforms but said NREP had been approached by a number of global investors seeking to gain access to the region.
”NREP is grateful to have found a group of very knowledgeable investors that share our strategic approach and vision of how to create stable long term value in the Nordic logistics segment,” said Rickard Dahlberg, founding partner and chief investment officer at NREP.
The portfolio will be managed by NREP’s logistics operating platform, Logicenters, which is the largest manager and developer of modern logistics real estate in the Nordics by assets under management.
The main advisors for the deal were Citi, Goodwin & Procter, Bech-Bruun, Real Advokatbyrå and Roschier.