Information on the Target

CapMan Social Real Estate Fund (CMSRE) has made its inaugural investment in the acquisition of three historically significant buildings located in central Helsinki, Finland. The investment comprises two daycare facilities operated by the French Jules Verne kindergarten and school, along with a third building designated for daycare use by the City of Helsinki, which is currently undergoing renovations expected to conclude in 2025. These properties are strategically situated close to the Hietalahti market square, ensuring excellent accessibility.

All three properties are subject to long-term lease agreements, with the two existing buildings recently refurbished to contemporary standards. Upon completion of the refurbishments, the facilities will cater to approximately 350 children from the local community, thereby fulfilling a critical need for early childhood education and care in the area.

Industry Overview in Finland

The Finnish real estate market, particularly in the social infrastructure sector, has been experiencing robust growth driven by increasing demand for essential services like education and healthcare. Investment in these sectors not only addresses social needs but also provides stable, long-term returns for investors. As urbanization continues, the need for well-located educational facilities is becoming more pronounced.

In recent years, the Finnish government has prioritized investments in social infrastructure, which further bolsters public-private partnerships and encourages private investment in these critical sectors. Analysts expect this trend to continue, with policies favoring sustainability and energy efficiency gaining traction.

Helsinki, as the capital city, serves as a focal point for these developments. The city's strategic location and progressive infrastructure make it an appealing prospect for investors looking to enter the social real estate market. With the increasing emphasis on environmentally friendly and sustainable building practices, projects that align with EU Taxonomy are particularly attractive to both investors and tenants in Finland.

Furthermore, as the demand for educational assets rises, there is significant potential for rental growth, providing upside to investors. The expected improvements to the Hietalahti area are anticipated to further increase property values and investment appeal, making social real estate a ripe sector for investment in Finland.

The Rationale Behind the Deal

This investment represents a strategic alignment with the CapMan Social Real Estate Fund’s mission to create long-term value through the acquisition of socially beneficial properties. The focus on educational facilities, which are integral to community development, correlates directly with CMSRE’s commitment to bolstering essential services.

By securing long-term tenancy with established operators, CMSRE enhances its risk profile while contributing to the betterment of the local community. Moreover, the commitment to achieving sustainability certifications like LEED Gold illustrates the fund's dedication to environmental responsibility, which is increasingly important to investors and stakeholders alike.

Information About the Investor

CapMan is a prominent Nordic private asset expert, known for its proactive approach to value creation within unlisted businesses, real estate, and infrastructure. With approximately €5 billion in assets under management and a commitment to sustainability, CapMan aims to deliver attractive returns while adhering to responsible investment principles.

The firm's real estate division manages around €4.2 billion in assets and encompasses a team of over 70 professionals, strategically located across key Nordic cities. CapMan's extensive experience and localized expertise position it well to identify and capitalize on investment opportunities in the Nordic social real estate market.

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This investment by CapMan in social real estate assets presents a promising opportunity within the Finnish market. The focus on educational facilities not only meets significant local demand but also ties into broader governmental initiatives toward enhancing social infrastructure. Such investments are increasingly vital, providing essential services that bolster community well-being.

The long-term lease agreements secured with credible tenants mitigate risk and suggest a stable income stream, aligning with the fund's goal of creating long-term value. The ongoing refurbishment plans, combined with energy-efficient improvements, further position these assets as attractive investments, potentially leading to enhanced tenant satisfaction and lower turnover.

Additionally, the strategic location of the properties within an evolving urban landscape supports the rationale for this investment. As the Hietalahti area develops, property values are likely to appreciate, underpinning the fund’s growth objectives.

In conclusion, CapMan’s approach represents a well-calibrated investment strategy that accounts for both social impact and financial returns, making it a strong candidate for future success within the Nordic real estate market.

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