The fund manager plans to build on the infrastructure created to run the SKr 17.3bn SPP portfolio.
Celexa Real Estate Investment Management operates in Sweden, the UK and the Netherlands. It was formed at the end of January as a result of the restructuring of the investment management division of Swedish pension fund SPP, which owns SKr 17.3bn of real estate.
Celexa is seeking to expand into real estate investment management on behalf of other institutional clients; it is in discussions with European and US investors, but nothing has been formalised, according to Philip Ingman, managing director of Celexa in the UK. The company is aiming to double its funds under management during the next five years.
The SPP fund performed well last year, producing a total return of 30%. Ingman believes that the group’s performance is a result of an analytical approach to real estate investment, and not being too insular.
“We have put together a ‘top down’ approach, which can make use of local knowledge,” says Ingman. “Our most recent figures show returns of 21% for the SPP [UK] portfolio, against 16% for the IPD index for the UK market for 1997,” he reveals.
The largest share of the portfolio, SKr 10bn, is invested in Scandinavia, SKr 6.3bn in the UK and SKr 1bn in Germany and the Netherlands. At end-1996, the last year for which figures are available, nearly 90% of the fund’s overseas holdings were offices or retail. About a quarter of the property is residential property in Sweden. Celexa manages the portfolio from three offices in Stockholm, London and Amsterdam.
There will be far more emphasis on running operations as a group than previously. “We work together through a committee of managing directors, and have a marketing committee for all three companies.” Swedish managing director Rickard Backlund explains.
Celexa’s first results will be known in a year’s time. For 1998, there is unlikely to be much change in the portfolio, although Ingman in London says acquisitions are “in the pipeline”. “The portfolio is rising in value rapidly, and we have more money to invest.”
The UK portfolio includes the trail-blazing Fosse Park retail warehousing development in Leicester. This £100m complex has recently been put forward for a proposed retail parks limited partnership, the first such vehicle in the UK. SPP has joined UK institutions Norwich Union and Hermes to pool properties worth £200m. SPP’s motivation in joining the fund is to dilute its UK holdings; Fosse Park represented around 20% of the portfolio.
“In the UK, we want to concentrate on the industrial sector. We would like to raise it from the current 12% of the portfolio,” Ingman says. A start was made in February, when Celexa bought an industrial complex in Salford for around £4.3m.
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Funds under management (SKr bn): |
|
|
Total |
17.3 |
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Of which: |
|
|
Scandinavia |
10.0 |
|
UK |
6.3 |
|
Netherlands and Germany |
1.0 |
Celexa Fastighetskapital AB
Box 3039
S-103 63
Sweden
Tel: +46 8 412 8060
Fax: +46 8 412 8001
