NORWAY - A strong Norwegian economy is expected to be a key driver for growth and returns in the property asset class, according to Aberdeen Property Investors' (API) international director Ubbe Strihagen.
“Property prices are highly correlated to the economical underlying growth of any country and therefore the property sector will continue to do well,” he said.
In relation to the Norwegian property index (IPD), Strihagen said he “expected returns of more than 10%” this year, notably stronger than the expected average European return.
“We feel the property market will be very good for Norway and the Nordic region as a whole. Those markets will outperform the European average on a three to five year basis.”
The positive forecast has come at a time when investors have committed an additional NOK 250m (e30m) in equity in the second closing of the Norwegian property fund, Aberdeen Property Fund Norway II. According to API the fund has a committed capital for property investment of approximately NOK 2 160m (e270m).
Espen Klevmark, managing director Norway, API, added: “The initial success of the Norway II fund is very encouraging. We expect a similar investment inflow throughout 2006, which will create a property portfolio of e600-800m.”
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