Germany's BVK mandates Hines with €1.3bn retail investment
Germany’s largest pension fund BVK Bayerische Versorgungskammer has mandated the US-based Hines to execute a €1.3bn separate account programme, focusing on investment in high street retail assets across 20 European countries. Hines has already bought the first asset, a landmark building on Oslo's premier shopping and pedestrian street.
Under the terms of the mandate, Hines will identify, acquire and manage core-plus, value-add deals for the €62bn pension plan, as well as development and redevelopment opportunities. BVK, with €62bn of assets under management, said it intends to hold the majority of the investments for the long term.
The Hines mandate is to encompass a range of value-added measures, including rental reviews, repositioning and re-leasing of units, store reconfiguration and light refurbishments. It will also include major redevelopments, including conversions and ground-up developments
The agreement is the latest in a line of mandates and investments on behalf of German pension funds worth €1.5bn to Hines over the last two years, the firm said. Among its deals was the 2014 acquisition of Amazon’s London headquarters for £245m for a German pension fund. Hines also set up the HV Trophy Mandate in February 2014 for a German institutional investor with €250m of initial equity to buy trophy properties in select European and US cities.
Lars Huber, co-chief executive at Hines Europe, said: “This is a significant mandate for our European business from one of the world’s leading investors in real estate. It enables us to capitalise on our integrated business model and leverage our pan-European platform to focus on value creation through active asset management, refurbishments and redevelopment.”
BVK is gearing up its investment in property as a proportion of total assets – with a particular emphasis on high street retail. According to BVK’s Norman Fackelmann, head of real estate investment management, the sector offers attractive fundamentals, and good opportunities to source value-add assets in strategic locations for long-term investing. “Hines represents the perfect fit for executing this strategy given the strong track record in asset level value creation across a broad range of markets,” he added.
The first deal under the mandate was a 5,100 sqm acquisition on Karl Johans gate, Oslo’s leading shopping street, bought in a sale-leaseback with Landkreditt Bank for €52m. “The building in Oslo is typical of the kind we are targeting; a well located, retail anchored asset offering both income and importantly, the opportunity to use our real estate expertise to deliver enhanced capital value to the investor,” said Hines Europe managing director James Robson.
US group Hines has $87bn of assets under management and is already well-established in Europe, with investments in France, Germany, Ireland, Italy, Poland, Spain and UK, as well as Russia.