Grosvenor Fund Management (GFM) and the Canada Pension Plan Investment Board (CPPIB) announced yesterday (July 21, 2011) that they have formed a joint venture partnership to invest up to £200 million (approx. 227 million) in London's West End office market over the next two years.
CPPIB will invest £190 million in this venture and Grosvenor Fund Management will invest £10 million and lead asset sourcing and management activities. The Partnership's strategy is to invest in London's West End and Midtown value-added office opportunities.
Scott Rowland, Commercial Fund Manager at Grosvenor Fund Management and the wider Grosvenor Fund Management team will use their extensive knowledge of this sector to identify opportunities to invest in value-add properties with shorter term lease profiles that can be refurbished to a class-A standard. The Partnership is targeting individual properties up to £100 million.
Wenzel Hoberg, CPPIB's Managing Director and Head of Real Estate Investments Europe, said, "This venture with Grosvenor Fund Management provides us with an entry into an attractive, niche commercial real estate market in West End London.
"This investment aligns with our existing European real estate investment strategy and introduces us to a well-respected partner in Grosvenor Fund Management, which has a unique knowledge of the West End office market and strong active management and refurbishment expertise."
Commenting on the announcement, Mervyn Howard, Director Grosvenor Fund Management, said: "We are delighted to have formed this venture with CPPIB who share our belief in the future strength of the central London office market. Grosvenor and Grosvenor Fund Management have been active in the London office market through many cycles.
"We have the in-house skills to execute the strategy of the Partnership and believe the timing is right. It is a perfect complement to the strategy of the Grosvenor London Office Fund which currently owns four high quality, well let prime West End office properties."
Source: Grosvenor Fund Management