Croatia’s largest pension fund, AZ, is diversifying into real estate and has made its first investment for the new strategy. The pension fund has acquired shares in M7 Primo, an SPV which has bought a 33,000 sq m logistics and distribution centre in Zagreb for €21 million.
Asset manager M7 Real Estate is advising AZ and will source commercial property investment opportunities in Croatia as well as managing the assets.
AZ said in the current low interest and bond yield environment it is attracted by the asset-backed nature of real estate and its ability to generate stable long-term income returns.
“Market circumstances have changed significantly and AZ pension fund is therefore actively seeking alternative stable and secure investment opportunities,” said Mario Staroselčić, member of the management board and CIO of AZ pension fund management company.
“We believe that the growing logistics and distribution sector, particularly in the circumstances created by the COVID-19 pandemic, offers an excellent initial opportunity to expand our investments,” he said.