07 August 2017
Reporter: Theo Andrew

Barings enters European resi, buys portfolio from pension insurance company

Varma Mutual Pension Insurance has sold seven residential properties in Finland to Barings Real Estate Advisors, on behalf of an institutional investor, for €43 million.

Totalling 18,770 square metres of rental accommodation located in Finnish cities Espoo, Tampere, Turku and Lahti, the properties have strong transport links and access to local services.

The acquisition is Barings’s first in the European residential sector and brings its assets under management in the Nordics to €844 million.

The $288 billion global asset manager recently purchased a shopping centre in Espoo and an office in Helsinki as part of its value-add strategy.

According to Barings, the almost fully-let 301-unit portfolio will offer stable income and long-term occupancy with potential upside coming through a targeted capital expenditure programme.

Göran Bengtsson, head of the Nordics at Barings Real Estate Advisers, said: “The demand for rental accommodation in Finland remains strong, both with prospective tenants and investors and with a limited pipeline of new developments alongside an ongoing trend of urbanisation, we expect this to be further strengthened over the coming years.”

He added: “With 46 percent of net rental income coming from the Helsinki metropolitan area, this portfolio provides significant and good quality exposure to the country’s largest growth cities and is well positioned to benefit from this demand over both the short and longer term.”

Ilkka Tomperi, Investment Director of Real Estate at Varma, said: “This transaction is part of our normal portfolio management. Varma owns directly around 4000 rental apartments in Finland and we are current developing several hundred new apartments in Helsinki Metropolitan Area and in Tampere. Some of which are already under construction and others in zoning process.”

Merilampi offered legal advice to Barings, while Newsec and Borenius advised Varma.

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