US teachers’ fund in JV with French insurer for German retail
US-based teachers’ pension fund TIAA-CREF, no stranger to the German real estate investment market, has invited French insurance company CNP Assurances to team up in a joint venture as investor in three German shopping centres, which it has already bought and currently manages.
The three properties are collectively valued at €924.1m and consist of the Erlangen Arcaden in Erlangen (which TIAA-CREF itself developed with German shopping centre developer MFI), the PEP Centre in Munich (which TIAA-CREF bought from RREEF in 2011 for €414m), and the Gropius Passagen in Berlin (bought from UniCredit’s WealthCap for €341m in 2012 with MFI as 20% joint investor).
TIAA-CREF has nearly 20 years of experience investing in Europe, and has been in German retail since 2007 with its first development, the Erlangen Arcaden. Although it has plenty of experience managing US real estate on behalf of institutional and sovereign wealth investors (including a recent joint venture to invest in US offices with Norway’s Pension Fund Global), but this is the first time it is managing European properties for a joint venture.
According to Tom Garbutt, TIAA-CREF’s head of global real estate, “Germany’s improving economy and limited supply of retail space continue to make these properties attractive assets in TIAA-CREF’s global real estate portfolio.
"This joint venture, with a partner like CNP Assurances who shares our long-term vision, will allow us to further diversify our portfolio and take advantage of investment opportunities that we believe will add value over time.”
TIAA-CREF has $542bn in assets under management (Sept. 30th), and directly owns more than $28.5bn in gross assets in the office, retail, industrial and multi-family sectors across the US and western Europe. Earlier this year it signed a global real-estate joint venture with the UK’s Henderson Global Investors which is due to kick off officially next March.
The listed CNP Assurances is France’s leading personal insurance company, which booked net profits in 2012 of €951m. It is majority-owned by state-owned Caisse des Depots, the Post Office Bank, and the BPCE central bank of the savings bank system.