UNION and Baard Schumann establish residential development fund
Great interest has been aroused in recent years by UNION’s portfolio of property funds in the market for commercial property. The time is now considered ripe for expanding the fund strategy with a separate product for residential development. The fund aims to raise NOK 2.5 billion for investment in opportunities in and around Scandinavia’s biggest cities. The fund will make investments on its own account as well as seeking collaboration with partners and other property players.
“ UNION has become one of Norway’s leading companies within commercial property and a complete supplier of broking, advisory and asset management services in this field,” says Endre Folge, CEO of UNION Gruppen.
“Turbulent markets are expected to offer attractive investment opportunities in the coming years. Our leading-edge expertise and experience from active ownership will be more important than ever. We have looked at opportunities to establish ourselves in the residential sector for some time now, and the timing for establishing a lean and flexible residential development fund seems right. We will utilise the breadth of our property expertise to create value.”
Schumann will serve as Managing Director of the new management company. Together with the team at UNION, Baard will capitalize on his experience from more than 20 years as the CEO of large housing developers such as Selvaag Bolig and Nordr. At Selvaag Bolig, he played a key role in its 2012 listing and the company delivered an annual return of 18 per cent to investors over the six following years.
“With UNION’s unique platform in real estate in mind, I look forward to being able to realise my ambition of building a powerful company which combines asset management and residential development in order to optimise the portfolio and value development,” says Schumann.
“I am proud to be doing this together with UNION, which is a leading player within the active ownership domain of real estate. We will start the work immediately, with the aim of making our first investments by the end of 2022. We will be seizing the opportunities”, says Schumann.
“We are pleased about the opportunity to establish a residential development fund together with Baard,” adds Folge. “His unique experience and knowledge of the residential market gives us a great starting point to offer attractive investment opportunities for our investors and partners.”
Commitment planned in several new segments
UNION’s asset management business offers property as an investment class to professional clients. The 30-strong team manages a portfolio of property funds with a combined value of more than NOK 21 billion. Folge took over as Group CEO in August and will, among other, head the group’s continued development into new segments.
“Rapidly rising interest rates, weaker macroeconomic prospects and an unstable geopolitical situation are affecting the property market,” he observes. “We now see a big potential in concentrating our efforts even more on the financial aspects of our business as well as on investment funds in future growth areas.
“We will continue to develop UNION within existing segments while simultaneously widening our horizon. A natural place to start is where megatrends and real estate meet. The new residential development fund is a first step in this respect, and we are now looking at a number of attractive opportunities both on our own account and with potential partners.”
For more information, contact Endre Folge or Baard Schumann.