In a move that underscores the growing institutional appetite for stable, socially aligned real estate, eQ Community Properties has completed the sale of a key school property in Espoo to Mutual Pension Insurance Company Varma—and simultaneously brought Varma on as an investor in its €1.7 billion social infrastructure fund.

The transaction, finalized on June 30, 2025, involves the Niittykumpu School in Espoo, where the City of Espoo is the anchor tenant. The property is now part of Varma’s expanding real estate portfolio, aligning with its broader strategy to deepen exposure to social infrastructure—one of the most resilient segments of institutional real estate.

But this deal is more than just another asset handoff. It cements a strategic alignment between two major Finnish institutions: Varma, one of the country’s largest pension investors, and eQ, the dominant player in Finnish social infrastructure property.

“Niittykumpu School fits our strategy perfectly,” said Jennifer Eloheimo, Head of Real Estate Investments at eQ. “And we’re thrilled to welcome Varma as an investor—it shows strong market trust in eQ’s expertise.”

Social Infrastructure Goes Institutional

Social infrastructure—schools, healthcare facilities, elderly care homes, public offices—has emerged as one of the most stable, ESG-aligned real estate sectors, especially in turbulent economic climates. These assets are typically backed by long-term public sector leases, offering investors inflation-linked income with low volatility.

That’s exactly what eQ Community Properties Fund specializes in. Established in 2012, it now holds over €1.7 billion in property value and €1.1 billion in net assets (NAV), making it the largest owner and developer of social infrastructure real estate in Finland. More than 50% of its holdings are concentrated in the high-demand Helsinki metropolitan area, with the rest spread across Finland’s six major growth centers.

“Social infrastructure forms an essential part of a functional and diverse society,” said Sampsa Ratia, Investment Director at Varma. “Our partnership with eQ strengthens our position in this critical sector.”

A Strategic Match with Strong Fundamentals

From a portfolio perspective, this partnership is a natural fit. Varma brings long-term capital and sustainability-focused mandates, while eQ offers on-the-ground expertise in acquiring, managing, and developing socially essential real estate.

eQ’s fund generates cash flow mainly from long-duration leases with public sector tenants, such as municipalities and state-backed institutions. That makes it especially attractive to pensions and insurers seeking stable, predictable returns.

“eQ’s experience complements our strategy and supports our goals as a responsible, long-term investor,” added Ratia.

The Bigger Picture

This deal reflects a broader trend across Europe: institutional capital is increasingly chasing “mission-critical” real estate—assets tied to education, healthcare, and public services—as they offer resilience, regulatory alignment, and ESG compatibility in a market that’s still shaking off the effects of inflation and interest rate volatility.

For eQ, the addition of Varma strengthens its investor base and solidifies its leadership in the space. For Varma, it’s a stake in an asset class that’s both future-proof and financially sound.

As governments and public institutions lean more on private capital to meet growing infrastructure needs, expect more of these symbiotic partnerships between specialist funds and heavyweight institutional investors.

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