NREP increases exposure to elderly care sector with 13-asset Swedish portfolio acquisition
€200 million acquisition made via NREP’s dedicated care home platform, Altura, on behalf of the NREP Income+ Fund
NREP, the leading Nordic real estate investor, announces that its NREP Income+ (NIP) fund has completed the acquisition of a portfolio of elderly care homes from Fastighets AB Stenvalvet, a Swedish real estate developer and manager, for c. €200 million. The portfolio increases NREP’s care home platform, Altura’s, exposure to demographically-driven projects that make a tangible difference to society, whilst meeting a clear long-term need, and generate income-orientated value. This transaction also aligns with NREP’s sustainability strategy and expands the Altura platform to over €1 billion of assets under management.
The care home portfolio is diversified across ten different municipalities of Sweden, and comprises almost 500 senior living apartments leased to a range of public and private operators, including reputable specialists such as Vardaga, Attendo, Förenade Care and Silverlife. The portfolio is fully operational and leased, with less than one percent vacancy, while NREP has identified clear opportunities to enhance its quality and value through a number of sustainability initiatives that will reduce the properties’ climate footprint, alongside a comprehensive asset management programme that includes a series of refurbishments and extension projects, catering to the robust demand for increased provisions of modern and fit-for-purpose elderly accommodation.
Jani Nokkanen, CIO and Partner at NREP, said: “We remain unwaveringly consistent in our customer-centric approach to investment, and consider the care sector to present a particularly attractive opportunity to deliver solutions to a clear societal problem, with the world’s aged population continuing to expand presenting an urgent need for suitable housing facilities. NREP views this fast growing and demographically supported sector as an attractive area that appeals on account of its high impact potential alongside the ability to effectively apply our market-leading sustainability practices.”
NREP has long pioneered sustainability in real estate, which plays a central role in its value creation strategy, and has committed to being carbon neutral by 2028 without offsets. It intends to immediately improve the environmental certifications of this new portfolio, through initiatives including the installation of solar energy panels and an overhaul of the internal climate systems to more modern and efficient sources.
Dorotea Stellmach, Head of Sweden of Altura, commented: “We look forward to integrating this portfolio into the wider Altura platform and enhancing its performance with a focus on sustainability and building productive relationships with the underlying tenants, operators and municipalities. NREP’s value-based philosophy extends beyond care homes, with similarly enriching potential offered through investment in other socially important functions, such as schools, where the business is well placed to capitalise.”
The share of the Nordic population over 80 years of age is forecast to grow by 50% over the next ten years, leading to an increase in the demand for care home apartments. In response to this evolution, Altura was launched by NREP in 2018 and serves as a dedicated owner and developer of care homes across the Nordic region. With a team of experts drawing experience from the fields of healthcare development, management and operations, Altura is at the forefront of creating a sustainable model of elderly housing for the future, with a portfolio characterised by high quality and home-like environments that have been designed to stimulate the wellbeing of residents.
NIP is an open-ended core-plus fund aimed at long-term investments into modern logistics facilities, middle-income residential, offices and care homes. NIP responds to a clearly identified and significant opportunity across the Nordic region, providing the global institutional investor community with access to a high quality and diversified portfolio delivering a robust income profile. NREP’s investment team has a proven track record in sourcing unique opportunities that offer the potential to create additional value by leveraging NREP’s in-house expertise in sustainability and customer-centricity product development.
NREP was advised on this transaction by Real Advokatbyrå, Svalner, Niras and RED Management.