Pohjola Pankki Oyj : New OP-Rental Yield fund offers diversified real estate
investments to private households
OP Fund Management Company Ltd is introducing a new direct property investment
fund. OP-Rental Yield invests approximately half of its assets in apartments,
30 per cent in commercial premises and up to 20 per cent in construction
The fund's diverse investment product range is enabled by fund advisor Pohjola
Property Management and portfolio manager Pohjola Asset Management. As one of
the largest real estate property managers in Finland, Pohjola Property
Management is also responsible for the fund's contracting projects.
Demand for this type of product is high, according to direct customer feedback
received by OP-Pohjola, and the company's Consumer Barometer published last
autumn. Survey respondents were asked where they would like to invest an extra
100,000 euros. The responses indicated that an average of 22 per cent would be
invested in buy-to-let homes.
"Investing in apartments on buy-to-let basis is already common in many Finnish
households", comments Samuli Sipilä, Managing Director of OP Fund Management
Company. "However, private direct property investments are often too
concentrated, which makes them prone to risk. Furthermore, managing buy-to-let
investments requires plenty of effort, which is entrusted to professional
portfolio managers in the case of a fund. A fund makes diversified property
investments available to the growing number of small investors. Real estate
investments also provide active equity and other security investors with the
benefits of asset diversification."
Sipilä continues: "The rental apartments in the fund offer stable returns. In
turn, commercial premises and construction contracting offer a higher yield
potential and the benefit of diversified risks. In most cases, private
households do not have the opportunity to directly invest in the latter type
Designed for long-term investments, OP-Rental Yield is a non-UCITS fund as
defined by the Act on Common Funds. Its minimum subscription is 30,000 euros.
The fund is open to redemption and subscription on a quarterly basis.
Subscription for fund units is handled through OP Private services.
The annual profit share paid by the fund is at least three quarters of its net
profit, rendering it similar to direct property investments. Besides
households, the fund is targeted at small and medium-sized institutions and
The initial core of OP-Rental Yield comprises apartment stock, with an
approximate value of 50 million euros, to be bought from OP Life Assurance
Company Ltd. Mainly located in the capital region, the apartments were built
in the 2000s and their average tenancy rate is 99 per cent.
For more information, please contact:
Samuli Sipilä, Managing Director of OP Fund Management, tel. +358 10 252 7196
OP-Pohjola Group is Finland's leading financial services group providing a
unique range of banking, investment and insurance services. The Group has the
mission of promoting the sustainable prosperity, well-being and security of
its owner-members, customers and operating regions through its local presence.
Its objective is to offer the best and most versatile package of loyal
customer benefits on the market. OP-Pohjola Group consists of some 200 member
cooperative banks and the Group's central institution, OP-Pohjola Group
Central Cooperative, with its subsidiaries and closely-related companies, the
largest of which is the listed company Pohjola Bank plc. With a staff of more
than 13,000 OP-Pohjola Group posted consolidated earnings of 601 million euros
before tax in 2012 and had total assets of 99.8 billion euros on 31 December
2012. The group has over four million customers.
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Source: Pohjola Pankki Oyj via Thomson Reuters ONE
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