German pension funds stepping up RE investment

German pension funds Bayerische Versorgungskammer (BVK) and Nordrheinische Ärzteversorgung (NAEV) have teamed up in a joint venture to purchase a newly built mixed-used property in Warsaw.

The UK-based Invesco Real Estate, part of US wealth management group Invesco, bought the 56,800sqm Plac Unii building for €226m on behalf of the institutions, both of which are separate account clients. The sellers were Belgium-based Liebrecht & wooD, a developer focused on eastern Europe, and Polish listed BBI.

This is the first time the BVK pension fund has entered into a joint venture with NAEV and a BVK spokesman said that the cooperation was currently limited to the Warsaw one deal - “but further joint ventures are not excluded”. He said that the joint venture was entered into on this occasion “because of the size of the BVK’s investment in this submarket and for this object” in order to allow for “risk diversification”.

The property will become part of the portfolios of the two Versorgungswerke via the investment platforms set up by BNP Paribas REIM for the €60bn BVK and Universal-Investment for the €11bn NAEV, respectively.

The class-A property, located on the edge of Warsaw’s central business district and only completed at the end of 2013, consists of three parts, with up to 21 storeys and 41,300sqm of office space, as well as 15,500sqm of retail space in total. The main office tenants are ING and energy services company Dalkia, and the retail space is let to a mix of clothing stores (including H&M), restaurants, cafés, a fitness studio and a supermarket.

Last summer, BNP Paribas REIM was part of a consortium alongside BVK to finance the development of the Mall of Berlin.

Meanwhile, the VGV Verwaltungsgesellschaft für Versorgungswerke, a pension fund for Berlin doctors and pharmacists, is pressing ahead with its first investment as part of the €500m mandate it granted CBRE Global Investors last year to invest on its behalf.

CBRE is now close to completing its first deal for VGV, the purchase of an office property in Birmingham, UK. The property, Brindley Place in central Birmingham, is let to the bank RBS, and is currently owned by investment company Tritax.

Early last year, VGV, through Union Investment’s Institutional Property arm, bought 60 Holborn Viaduct in central London for around £250m in a joint venture with Hines, with Mercer Investment Consulting advising VGV. The building is let to Amazon as its UK headquarters.

CBRE also has a €500m mandate to invest on behalf of pension fund BVK in global real estate markets. BVK awarded CBRE the mandate in 2013 ““in a bid to diversify its exposure to the asset class, targeting property types across geographies, capital structures and risk profiles”.