Evli has launched the new Evli Residential II residential development fund, the strategy of which is based on own real estate development and independent management of the entire value chain. Own real estate development offers investors a significantly higher expected return compared to traditional rental property investment.
Urbanisation, the growing popularity of rental housing and shrinking household sizes are supporting the housing market in growth centres, with no end in sight for these trends. Over the past 20 years, professionally managed rental housing has offered an annual return on investment of more than 8%, which is more than the rest of the real estate market.
"Finland's net rental yield is at an attractive level even by international standards, and international investors have noticed this over the past five years. However, strong demand has lowered return requirements, so there is now demand for new innovations and solutions in fund-based investment in the housing market," says Tero Tuominen, who heads the Evli Residential II fund.
Evli's new fund is the successor to the EAI Residential I fund, which has been in operation for six years, and both have a unique strategy based on in-house development of the real estate. The funds' experienced nine-strong residential portfolio management team has a strong track record of successful residential development.
"Own real estate development allows investors to share in the development margin. In addition, the sites can be optimised as part of a rental portfolio and even demanding aspects related to sustainability can be taken into account, such as energy solutions and building materials. This is not possible in the typical model where sites are bought as pre-developed properties from auctions," says Tuominen.
The Evli Residential II fund invests in apartments in the capital region and in growth centres such as Tampere and Turku, as well as in selected peripheral municipalities – a micro-location is selected based on a detailed analysis to maximise occupancy and rental income (taking into account development trends, population growth, accessibility and services).
"The fund already has a strong pipeline of projects, which is of great importance in the current competitive investment market. During its six-year mandate, the fund aims to develop a leased housing portfolio of more than EUR 300 million and to realise the development return quickly after completion," says Tuominen.
The new fund is part of Evli's comprehensive alternative investment fund offering, which includes the real estate, private equity (unlisted shares), infrastructure, forestry, and private debt asset classes. There are 10 alternative funds in total, managed by a portfolio management team of over 20 people. The funds have a combined client asset base of around €1.4 billion (30.9.2021).
Evli Residential II is aimed at professional investors and a limited number of non-professional clients who have a sufficient understanding of the fund and its investment activities. The minimum investment in the fund is an investment commitment of EUR 100,000.
Further information:
Tero Tuominen, Head of Alternative Investments, tel. +358 50 439 2867, tero.tuominen@evli.com
