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Peter Leimdörfer, Glitnir: Finland is an attractive market with lower prices than the other Nordics |
Peter Leimdörfer, managing director of the €5 billion company, says it will build on its Swedish and Norwegian foundations.
Glitnir was formed in mid-April through the joining of Norway’s Glitnir Property Group and Swedish real estate adviser Leimdörfer.
The move comes as several international players look towards the Nordic markets as an area of, as yet, untapped property related profits.
The formation of Glitnir Property Holding is the first step in a strategy to create a leading commercial real estate advisor in the Nordic market. The new entity will be 70% owned by Glitnir Bank and will have Frank Reite as chairman.
Peter Leimdörfer confirms the expansion plans. “We have a strong presence in Sweden and Norway already and so now we are looking to go into places where we can really add value,” he says. “We are particularly looking at increasing our presence in Finland as their market is experiencing huge inflows of capital as prices are still lower than in the rest of the Nordic region.”
He says that the Nordic countries are often wrongly considered as one market by international investors. “Sweden has already experienced large international inflows, Finland is starting to experience it, but Norway’s property market is still nearly 95% domestic as international players are pushed aside by local wealth,” he says.
But it seems the Nordic markets are starting to homogenize as more institutions look to invest across the region. “The region is easy to get into,” explains Per Holm, head of the Stockholm branch of EuroHypo. “We have high levels of transparency and access, you could sit at home anywhere in the world and start to enter the real estate market. Legal and tax requirements are also attractive to international investors.”
Glitnir Property Holding is not the only new venture created as a result of an international investor demand to enter the Nordic markets.
Protego Real Estate Investors launched a Nordic retail fund, which will reach €1.65 billion once geared up from €585 million in equity, in March. “This is the first specialist retail sector fund in the Nordic region,” says Charles Weeks, head of business development at Protego. “One of the primary reasons why we chose to do a retail fund is to tap into the strength of the Nordic economies and the excellent levels of consumer spending present in the Nordics. We expect the fund will prove popular with investors from the UK and mainland Europe.” It will aim for 9% ungeared base rate returns.
Protego is working in partnership with EFM Sverige, the property services division of Boultbee Land, which have been active in the Nordics for a couple of years.
Weeks says working with EFM will help to source properties in markets, which are notoriously hard to get into.
“Our initial focus is on Sweden and Finland but over time we will also be investing in Norway and Denmark,” he says.
Within a couple of years Weeks hopes that 60% of the fund will be focused on Sweden, 20% to 25% in Finland and the rest split between Norway and Denmark. The initial portfolio comprises 11 shopping centres located in monopoly positions within towns.
Not only do these real estate firms hope to infiltrate the entire region but they also see an opportunity to generate big returns.
“There are significant opportunities in the Nordic countries for asset and property management value enhancement,” says Weeks. “There is significant scope for rental increases by utilizing techniques and experience gained in other retail markets.”
He adds: “We are taking some of our asset and property management practices to the region, but, we in turn are also learning a range of local skills, such as the improved leasing structures, which can then be implemented in other markets.”
