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Partners buys into NOK2.1bn mall portfolio

The Zug-based private fund manager has bought a majority stake in four Norwegian malls as part of a club investment.

Partners Group, the Zug-based private funds manager, has bought a 75 percent interest in a portfolio of four Norwegian malls valued at NOK2.1 billion (€253 million; $343 million) alongside a developer and an operator, according to a Partners statement.

Other than Partners, the joint venture buying into the malls includes Norwegian shopping center developer Sektor Gruppen which will control a 15 percent stake and domestic shopping center operator Steen & Strøm which will control a 10 percent stake in the partnership.

The four shopping centers in the portfolio comprise Stovner Center in Oslo, Halden Center in the city of Halden, Torvbyen in Fredrikstad and Markedet in Haugesund. The four centers have a total floor area of about 1.08 million square feet with about 250 shops between them. The shops already have tenants such as multinational clothing retailers H&M and Mango, and food seller Meny.

Partners Group said in the statement that it considers this investment to be a value-added play, as the firm plans to implement several expansions and manage upcoming lease rollovers during its tenure as an investor. Partners also plans to implement several capital expenditure and cost programs to improve the competitiveness of the malls.

“The portfolio provides exceptional access to the attractive local Norwegian economy and combines strong cash flows with upside potential through numerous potential value-added initiatives,” Chris Lydiker, a senior investment manager in the private real estate team at Partners, said in the statement. “We believe that the partnership is well positioned to manage the assets and create value.”

Partnering with operators for direct real estate investments is one of the most common ways Partners invests in real estate although the firm is well known for its real estate secondaries strategy, as well.

In October, PERE revealed that Partners had raised $800 million across two new real estate funds – a fund of funds and a secondaries vehicle – with a target of $1 billion for each vehicle. If successful, the two vehicles would become what is said to be the largest global real estate multi-manager vehicle and one of the largest real estate secondaries funds ever raised. Partners expects to hold final closes on the funds in the latter half of next year.

With approximately €30 billion assets under management across private equity, real estate, debt and infrastructure, Partners has 16 offices the world over. It’s investors are mostly institutional investors, and about €4 billion of its assets are in real estate.