TIAA-CREF, a leading financial services provider, and the Swedish National Pension Funds AP1 and AP2 have agreed to combine forces in a new joint venture to create a leading, pan-European office investment platform. TIAA-CREF’s affiliate, TH Real Estate, brought the parties together and will manage the vehicle on the investors’ behalf, providing investment and asset management services.
The joint venture will be seeded with existing properties owned by the TIAA General Account, AP1 and AP2, creating an initial platform valued at €2.2 billion . The venture will also commence an active investment program with new capital from the TIAA General Account, AP1 and AP2 targeting an additional €2 billion of investment over the next 3 years.
It will primarily target ‘core’ investments in Tier 1 cities such as London, Paris, Munich, Hamburg, Frankfurt and Berlin. Additionally, the investment program will invest in ‘value-add’ opportunities such as leasing, renovation and development opportunities in Tier 1 cites, or stabilized core investments within Tier 2 cities that include Madrid, Milan and Amsterdam, among others.
Phil McAndrews, Senior Managing Director and Chief Investment Officer of TIAA-CREF Global Real Estate said: “Our investing partnership with AP1 and AP2 -- like-minded investors who share our long-term investing horizon and focus on high quality assets -- enables us to further diversify TIAA’s existing European office portfolio across asset, tenant and market exposures while establishing a broader platform to expand our European investments. Working collaboratively with two established players in the European office space is exactly the type of growth opportunity we envisioned for TH Real Estate when we launched the firm in 2014 and acquired full ownership earlier this year.”
Eva Halvarsson, CEO AP2 said: “In 2011, in partnership with AP1, we established Cityhold Property AB with a view to investing in real estate in the major European cities. Now that Cityhold’s property portfolio is being merged with TIAA-CREF’s European portfolio of commercial real estate, we have successfully enhanced and diversified the portfolio of European real estate, in line with the strategy originally outlined for the company. Moreover, with TH Real Estate, we gain an operating partner of considerable expertise, especially with regard to local markets.”
Johan Magnusson, CEO of AP1, said: “We are excited to merge the existing Cityhold properties with those owned by TIAA-CREF, while also making a commitment to make further investments in the coming years. The greater capital base provides the vehicle with better opportunities to make good long-term investments in commercial properties in a number of selected large European cities.”
The newly formed investment vehicle will be named ‘Cityhold Office Partnership’. TIAA-CREF will hold a 50% interest in the vehicle and each AP fund will hold 25%. The 15 seed assets, (9 contributed from the TIAA General Account and 6 from AP1 & AP2), total 2.7 million square feet and include landmark assets such as 12-14 New Fetter Lane and One Kingdom Street in London, Tour Areva in Paris, and Atlantic Haus in Hamburg.
TIAA-CREF, AP1 & AP2 Create Strategic Joint Venture
Sweden —
TIAA-CREF, AP1 & AP2 create a strategic joint venture to invest in European office properties <br />
TH Real Estate will manage the vehicle and create a leading, pan-European office platform committed to building €4bn+ office portfolio.<br />
2015-08-28
Nicklas Tollesson
[email protected]