The 10th IPD KTI Nordic Property Investment Briefing attracted some 120 property professionals to participate debates around series of research-based presentations on trends across and beyond the region. Key themes included the outlook for the Nordic markets, trends in property finance, risks through the real estate investment process, and investor appetite for real estate.
One of the keynote presentations was provided by Timo Ritakallio, Deputy CEO and CIO, Ilmarinen Mutual Pension Insurance Company, one of EuropeÂ´s largest pension funds. The presentation explained the shift in strategic allocations to reduce Fixed Income exposure and increase Real Estate, and the plan to grow international real estate. Mr Ritakallio provided a lucid explanation of the evolution of the investment strategy, including disappointment with the performance of closed end real estate funds, and desire to find strong long-term local partners in the Nordics, France, Germany, UK and US. This presentation was complemented by material from Gunnar Herm (UBS) and Peter de Haas (Cornerstone) on the different access routes and range of investment styles in real estate, across global markets.
The sessions on the outlook for the Nordic markets explored the historical context, current pricing and prospects of the markets. The presentation by HÃ¥vard BjorÃ¥ of IPD demonstrated how the Nordics have performed relatively well in a European and global context, albeit with considerable variations in performance between the stronger, Norwegian and Swedish, markets, and the weaker Danish and Finnish markets. These variations are set to persist, with the panel discussion suggesting the best short term prospects are in Sweden, although there are significant variations within countries as much as between them. The record-low yields of the prime assets in Nordic capital city areas may currently limit some investorsÂ´ interest, but good investment opportunities can be found in, for instance, second tier cities for investors with larger risk appetite. One of the positive features for the Nordic markets as a whole relates to the increased availability of debt finance for property investments. The availability has improved significantly during the past year, and various sources can be exploited by different types of investors.
The importance of local and asset-specific variations was a theme addressed in the session focused on risks through the real estate process. Peter Hobbs from IPD explained the ways that risk management is being tightened through the investment process and his presentation explored the ways that real estate risk is being considered in a more systematic way alongside other asset classes, and the particular impact of geographic diversification and leverage. Alex Krystalogianni (Allianz Real Estate) explored some of the key considerations involved in developing a real estate investment strategy, including approaches to the measurement of risk and other considerations including geo-political and real estate transparency. The session was ended by a practical exploration of the ways that risk management is being embedded in the investment processes by David Neil, CEO of Genesta Property Nordic. Mr Neil explained the transformation that is underway at Genesta to strengthen risk management, in response to investor pressure, and to support regulatory compliance such as AIFMD.
For further information, please contact:
- Hanna Kaleva at KTI: +358 40 5555 269 / hanna.kaleva(a)kti.fi
- Christina Gustafsson at IPD: +46 70 813 5757 / christina.gustafsson(a)ipd.com