On Wednesday, NREP, the Danish-headquartered, private real-estate developer that is actively invested across the Nordic region, announced that it has raised EUR 1.9 billion (about $1.2 billion) for its fourth Nordic strategic real estate fund (“Nordic Strategies Fund IV”). The fund—NREP’s largest-ever real estate fund—will invest in “underserved” real estate segments across the Nordics, particularly residential rentals, care homes and logistics properties.
NREP’s Nordic Strategies Fund IV will seek to address needs arising from long-term structural and demographic changes in the fast-growing Nordic capital city areas.
“We analyze…relevant problems to solve with our approach,” NREP CEO Claus Mathisen said in a company announcement. “For example, the Nordic capitals lack housing solutions targeted to low- and middle income, which creates a need for smaller, more affordable rental units. Also, the age group above 80 is increasing by more than 50 percent until 2030 across the Nordic countries, leading to a widespread shortage of care homes.”
NREP’s first commitments for the new fund include 12 care homes primarily in Sweden, where—according to CEO Mathisen—40 percent of municipalities nationwide are reporting an immediate shortage of care home capacity.
Residential rentals are another area of focus for Nordic Strategies Fund IV. NREP plans to develop 108 net-zero energy apartments outside Stockholm, and a large residential project bringing some 400 DGNB (German Sustainable Building Council) Gold-Certified apartments to the Sydhavn district of Copenhagen. NREP has developed a new joint venture with Norway’s Oslo House to buy and develop residential properties. In Finland, NREP has invested in several “serviced studio” apartment properties under the Noli Studios platform.
NREP is pursuing investments in other commercial property sectors, as well. The fund plans to invest in several logistics properties across the region, notably in Sweden, where NREP is developing the largest rooftop solar installation in the Nordic region. Additionally, NREP will co-invest in refurbishments to the Clarion Hotel Amaranten in downtown Stockholm, to reduce the building’s climate footprint. And according to NREP Chief Investment Offer Jani Nokkanen, the firm is also “seeking opportunities to improve the customer value proposition in the flexible office segment.”
NREP’s investor base is comprised primarily of global (and Scandinavian) pension funds. Newcomers to Nordic Strategies Fund IV include Danish pension fund Industriens Pension, which invests on behalf of some 410,000 industrial employees in Denmark (roughly 7 percent of the country’s population). The fund is also backed by Novo Holdings, the holding company of Denmark’s Novo Nordisk Foundation, one of the world’s largest charitable endowments with nearly $60 billion in net worth (as of 2019), which is used to support scientific, humanitarian and social causes. Novo Holdings has been an investor in NREP since 2018, and recently acquired a 25 percent stake in the investment firm.