26-06-2014 15:22 PM | News

Farmers turned fund managers expand Swedish property portfolio by 65%



The group of Welsh dairy farmers who turned their own investment success into the profitable Swedish property investment fund, Evanridge Properties LLP, announce today the acquisition of 152 student flats in Trollhättan, voted Sweden’s best student city 2014/2015. Spanning a variety of properties, from canal-view luxury penthouses to affordable commuter homes, Evanridge’s current property portfolio is valued at over £28 million and each investment fund has delivered returns in excess of 12% per annum.

Since 2006, when the Evanridge team’s research identified the strength of the Swedish property rental market, Evanridge has been investing in properties in the towns surrounding Sweden’s second city - Gothenburg, including Trollhättan and neighbouring Vänersborg and Uddevalla. Before launching their fund, the Evanridge team had shortlisted several potential investments in Europe and done their homework, flying from Cardiff to various countries including Poland and Latvia, to find out more about each market before finally settling on Sweden.

Sweden’s market conditions had been consistently favourable over the last decade and the towns they were most drawn to were undergoing significant infrastructure improvements. Rents in Sweden deliver year-on-year reliable and transparent returns protected from boom and bust because they are set by local authorities and inflation-linked.

The demand for rental property in Sweden was also a draw; 65% of the population lives in a rented or communally owned property and there continues to be a significant under supply of rental accommodation.

They built a framework of local partners including Swedish banks and property experts and began amassing a portfolio of 233 residential flats and 9 commercial properties spanning two funds. The properties are managed on-the-ground by a full time team in Sweden which means that the directors and investors maintain a high standard of property and tenant, maximise the yield on each property and can identify strong investment opportunities as they arise.

Following the launch of their third fund, Evanridge Sweden 3AB this year, they have increased their number of residential flats by 65%. By purchasing two blocks of student flats in Trollhättan totalling 152 individual residences, Evanridge brings its total number of flats owned to 385.

Nigel Evans, partner of Evanridge Properties comments: “These two blocks of flats represent an ideal purchase for our third Swedish property fund, with great potential to improve yields. In 2008 the university college campuses from three local towns merged into one campus at University West in Trollhättan. The town is now home to 11,500 students during the academic year and was named Sweden’s best student city this year by the Swedish National Union of Students.

“We’re looking for stable, long term gains rather than speculating on capital growth. We buy properties like these with incumbent tenants and operate them as profitable, going concerns. In many ways it’s like running our farms, we deliver strong returns because we invest based on the expected annual yield generated and whether that can be improved through better management practices. Trollhättan’s growing student population and increasing popularity as a place to study means these student blocks tick all our boxes.”

Evanridge is also in the final stages of preparation for the building of a new residential block on a plot of land in Trollhättan, which was included in a purchase of an adjacent block of luxury flats. These premium canal side homes are part of one of the earlier Evanridge funds and have been granted planning permission after a two year process. The building has been almost completely sold off-plan to a housing co-operative, a system which allows residents to join together to buy a block of flats and a ‘share’ in the property, granting them the right to reside there.

The next closing date for the third Evanridge investment fund is 31st July 2014 requiring a minimum investment of £25,000. The fund will target a return in excess of 12% p.a., net of all fees and expenses, which over a seven-year term would see the initial investment more than double in value. It has no initial fee, an annual management charge of 1 per cent and a 1 per cent acquisition fee.

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