Information on the Target

CapMan Nordic Property Income Fund (non-UCITS) has completed the sale of Tonsbakken 12–14, a warehouse property located in Skovlunde, a suburb of Greater Copenhagen, Denmark. This warehouse was part of the fund's portfolio since its acquisition in 2018. The property is now being sold for redevelopment to two separate entities: atNorth, a Nordic data centre services company, and Propreco, a Danish property developer.

The divestment marks a strategic move for the fund, reflecting its ongoing commitment to active portfolio management and identifying opportunities in liquid markets.

Industry Overview in Denmark

The Danish property market has demonstrated resilience and adaptability in recent years, buoyed by strong economic fundamentals and a robust demand for logistics and industrial spaces. The e-commerce boom, particularly during the post-pandemic period, has driven a surge in the demand for warehouse properties, as businesses seek efficient supply chain solutions.

Additionally, Denmark's strategic geographic location in Northern Europe has made it an attractive hub for logistics companies and data centres, further supporting the warehouse sector. Investment in sustainable and technologically advanced facilities is rapidly gaining traction, following Denmark's ambitious environmental initiatives.

Moreover, the Danish government continues to promote urban development policies that foster infrastructure growth and development in both urban and suburban areas. The emphasis on sustainability and ESG (Environmental, Social, and Governance) principles has influenced investment decisions, making properties that meet these standards increasingly valuable.

With an optimistic outlook for the industrial and logistics real estate sector in Denmark, investors are strategically positioned to capitalize on forthcoming opportunities, particularly in redevelopment projects involving older properties.

The Rationale Behind the Deal

The decision to sell Tonsbakken 12–14 aligns with CapMan Nordic Property Income Fund's strategy to actively manage its investment portfolio while pursuing new opportunities for capital appreciation. By divesting assets that are primed for redevelopment, the fund can recycle capital and potentially invest in properties that offer higher returns, thus maintaining its target of a 7% annual net return for unit holders.

This strategic move also underscores the fund's commitment to sustainability, as redevelopment often focuses on modernizing facilities to meet contemporary needs, including energy efficiency and technological integration.

Information About the Investor

CapMan is a prominent Nordic private asset management firm, recognized for its expertise in unlisted investments across various sectors, including real estate. With a total of €5.1 billion in assets under management, CapMan employs around 180 professionals in offices located in major Nordic cities and London.

The company has a solid track record of value creation, having been a pioneer in private equity within the Nordic region for over three decades. CapMan is committed to meeting its greenhouse gas reduction targets aligned with the Science Based Targets initiative, demonstrating a strong alignment with global sustainability goals.

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This transaction appears to be a promising investment decision, reflecting the fund's proactive management approach. The decision to divest the Skovlunde warehouse not only capitalizes on current market conditions but also allows for reinvestment into more lucrative opportunities, essential for maintaining growth in a competitive environment.

Moreover, by partnering with entities like atNorth and Propreco, CapMan is aligning with the rising demand for data centre services and sustainable urban development, positioning itself strategically within the market.

The projected growth of the logistics sector in Denmark, particularly in light of ongoing urbanization and increased e-commerce activity, further enhances the investment potential of CapMan's strategy. This divestment and subsequent redevelopment could yield significant returns for the fund and its investors.

Overall, while the sale was seemingly motivated by strategic portfolio management, it also addresses broader trends in the market, positioning CapMan favorably for future ventures in the dynamic Danish property landscape.

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