Growing interest in real estate fun

Asset managers are tempted by attractive yield rates in commercial properties. CapMan has established CapMan Real Estate I Ky, and East Capital plans a Baltic-focused property fund. Simultaneously, Carnegie has reported the launch of its first property fund. There are about 400 non-listed European real estate funds at the moment. CapMan Real Estate I Ky has already raised E500m, backed by nine Finnish institutional investors: Veritas Pension Insurance Company, Veritas Life Insurance Company, Etera Mutual Pension Insurance Company, Suomi Mutual Life Assurance Company, Varma Mutual Pension Insurance Company, Kaleva Mutual Insurance Company, Local Insurance Mutual Company, Sampo Life Insurance Company Ltd and The State Pension Fund.In terms of structure, the fund has a 10-year lifespan, and 3-year extension. Focusing on commercial properties in the metropolitan Helsinki area, CapMan will benefit from its local expertise. It has already made 17 investments with a total value of E220m.CapMan has established a subsidiary, CapMan Real Estate Oy, to act as the fund management company. The private equity house owns an 80% stake, while 20% is held by Jukka Iivari, who is also the chairman of the board.East Capital, a Sweden-based asset manager, has established a partnership with Arco Real Estate to launch a property fund, Explorer Property Fund - Baltic States. Targeting E30-50m, the fund is expected to provide investors with an annual pre-tax dividend yield of 4-6% after the fund is fully invested, and a net annual return on equity above 15%.Kestutis Sasnauskas, founding partner of East Capital, said: 'Over time, the region's strong economic development and entry into the EU will drive the property market towards European metrics.' By focusing on Baltic commercial properties, yield-based returns and value growth, the fund will aim to reduce risk. The minimum subscriptions are set to be E35,000.Carnegie launched Carnegie Property Fund Sweden in March 2005. According to Dagens Industri, the fund has raised almost SEK 1bn. Backed by 15 institutional investors, it has an investment capacity of SEK 3bn. Staffan Olsson, managing director of Carnegie Property Fund Sweden, said: 'We will now intensify our search for property to buy. We are already looking at several interesting investment options.'

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• Nordics
• Real estate