Foreign investors push Nordic CapMan first close to €313m

Nordic private equity firm CapMan Real Estate has raised €313 million at first close for its latest real estate fund. CapMan Nordic Real Estate III is on course to achieve its €500 million target by the end of the year making it CapMan’s biggest fund to date. With leverage it will have spending power of €1.2 billion, the firm said in a statement.

CapMan Nordic Real Estate III fund has equity commitments from Nordic, European, and North American institutional investors. “The fund’s investor base is distinctly international, with approx. 70% of commitments so far coming from outside the Nordic countries,” said CapMan Real Estate managing partner Mika Matikainen.

Fund to target ‘transitional’ offices and residential

The new vehicle which is a Nordic value add property fund, succeeds CapMan’s two earlier Nordic value-add funds raised in 2013 and 2017. Like these funds, CMNRE III will mostly invest in “transitional offices” and select residential strategies in capital cities as well as in other major growth centres in Sweden, Finland, Denmark and Norway. It may also invest selectively in other property sectors “supported by prevailing megatrends”.

“The Covid 19 pandemic and related uncertainty has sparked a debate regarding the demand for office space as many industries and work practices are in transformation,” Matikainen said. “In our experience, the demand for modern and flexible office space has remained high especially in central locations where tenants value high quality and versatile solutions.

Mika Matikainen.

“Simultaneously, there is demand for the refurbishment and transformation of older attractively located office stock to comply with requirements for other types of use, such as schools and public services, which is also a focus area for our fund,” Matikainen added.