AP1, Stockholm, and AP2, Goteborg, Sweden, will create a joint company to invest a combined €500 million ($704 million) in direct commercial real estate, confirmed Johan Magnusson, CEO of the 218.8 billion Swedish kronor ($34.3 billion) AP1.
“This is a way to invest in European core and core-plus real estate as an alternative to investing in a fund,” Mr. Magnusson said in an interview. The new company will not invest in Swedish real estate.
Funding will come equally from AP1 and the 222.5 billion kronor AP2. No details were given on how the project would be funded.
The company has not yet been named. Rickard Backlund, who retired as CEO of Aberdeen Property Investors in September, was named company chairman; a search for a CEO and other board members is ongoing.
In December, AP1 created a separate company, Willhem AB, which will invest 7 billion kronor in Swedish residential properties. And Vasakronan, a government-owned property portfolio bought by AP1 and the three other main AP funds in 2008, runs about 20 billion kronor in mostly commercial direct real estate investments for each of the four major AP funds.
Stockholm-based financier and asset management group Catella AB is helping set up the company and identify office properties in major European cities. Mr. Magnusson said the fund-owned company will be “tiny” and will outsource nearly all of its functions.
