Executive Summary on Schroder Nordic Real Estate Fund
The Schroder Nordic Real Estate Fund provides professional institutional investors access to a commercial real estate allocation in the Scandinavian region. The German Spezial-AIF has a long standing track record and was launched in August 2005. Schroder KVG mbH in Frankfurt and its branch in Stockholm comprise of a team of 18 real estate professionals. The local team in Stockholm paired with the dedicated internal research team based in London working hard in identifying drivers for actual and future strong locations as well as monitoring trends in rents across the region, which is the base for long term decision making processes.
The objective of the Schroder Nordic Real Estate Fund is to invest, divest and manage a well-diversified real estate portfolio of mainly core and core+ assets with the target of a stable cash distribution. The dominantly core investment strategy combines an upside potential of upcoming micro-locations and opportunities for income growth within the buildings. The funds volume is > € 600 million gross asset value and since inception the fund’s dividend yield was at 5.0% p.a. and an IRR of 6.4% p.a. and its performance data are part of the MSCI SFIX Europe funds, of which the Nordic vehicle belongs to the leading funds across Europe (as of 31st of March 2020). It can be highlighted that the distribution is after fees and currency hedging.
The regional investment allocation focuses on the economic growth regions within the northern European countries - Sweden, - Finland, - Denmark, - Norway to emphasis on stability.
Sweden and Norway represent from a macroeconomic perspective a defensive strategy, which offer strong fundamentals as well as positive demographics. This constellation is an essential part for our investment allocation process and has an impact on the way we pick properties in the region. The portfolio focus is on Stockholm, the Öresund Region (Malmö - Lund – Helsingborg) and Gothenburg.
Finland as a member of the Eurozone plays an integral part of our fund’s country allocation. The ingredients of a solid economy, the linkage to the European Union and the motivation to grow the local mobile technology sector reflect a good base to create strong performance with real estate investments. The Finnish market mainly behaves post-cyclical to the Swedish market, which we embed in our strategic stock selection. The fund currently has a planned over allocation to Finland with a bias towards Helsinki to make leverage of the economic growth potential of a leading city within a Eurozone country.
Denmark is also one of the strongest economies not only in the Nordic region, but also in Europe. Copenhagen as the capital had robust economic growth in recent years, the general population’s emphasis on an eco-friendly environment as well as strong real estate fundamentals make the city a natural target of our investment strategy. The fund has the short term ambition to expand its allocation into this region with a substantial proportion of the portfolio’s gross asset value.
At Schroders we believe it is our responsibility as real estate investors to identify, understand and manage environmental, social and economic impacts, positive and negative, to deliver resilient investment returns for the long term and manage exposure to impacts of financial and non-financial risks.
At Schroder Real Estate understanding these issues and their impacts is integral to our investment process and applies to all aspects of real estate investment including acquisition due diligence, asset management, property management provided by third parties, refurbishments and developments. Understanding and improving the impacts of real estate investment to the environment and society sits alongside our priority to maximise returns for our clients in a manner consistent with our funds’ risk profiles.
Our sustainability approach ”Real Estate with Impact” is founded on four pillars of impact – People, Planet, Place and Prosperity. These pillars are referenced to the UN Sustainable Development Goals: 8 Decent Work and Economic Growth; 11 Sustainable Cities and Communities; 13 Climate Action, recognising the contribution of the built environment and our responsibilities as real estate investors to society, the environment and economies.
We believe an investment programme which is sustainable should deliver enhanced returns to investors, improved business performance to tenants and tangible positive impacts to local communities, the environment and wider society for the long term.
Schroder Real Estate maintains an Environmental Management System certified to ISO 14001 to manage the deliverable actions derived from our Real Estate with Impact approach. The system applies to all aspects of direct real estate investment including acquisition due diligence, asset management, refurbishment and development as well as services provided by third parties.
Schroders participates in the Global Real Estate Sustainability Benchmark “GRESB” which is the global standard for real estate funds and companies. Schroder Real Estate is also a GRESB Participant Member and a member of the Better Buildings Partnership.
Schroder Real Estate’s Net Zero Carbon Commitment
Schroder Real Estate has committed to Net Zero Carbon by 2050. See what net zero means for our real estate activities and view our Net Zero Carbon Pathway on our website.
More information
More details on Schroders Real Estate with Impact approach are available on the internet site:
https://www.schroders.com/en/uk/realestate/products--services/sustainability/
This fund does not have the objective of sustainable investment or binding environmental or social characteristics as defined by Regulation (EU) 2019/2088 on Sustainability-related Disclosures in the Financial Services Sector (the “SFDR”). Any references to the integration of sustainability considerations are made in relation to the processes of the investment manager or the Schroders Group and are not specific to the fund
