Hines, the international real estate firm, has announced the closing of the Hines Russia & Poland Fund (HRPF), a Luxembourg-based fund which has been formed to invest more than 900 million into Russian and Polish real estate investments.
This is the fourth Hines fund with a strategy to invest in Russia and Poland. Equity has been committed to the fund from a diverse group of financial institutions, sovereign wealth funds, pensions, trusts and other institutional investors from Europe, Asia and the US.
Hines' local platform teams in Russia and Poland led by country managers Lee Timmins and Mietek Godzisz, respectively, will execute and manage the investments on behalf of the fund, which will be managed by a dedicated Luxembourg fund team led by X. Simon Shen.
The fund targets to invest approximately 80% of its capital in Russia and 20% in Poland. The opportunistic HRPF strategy will operate alongside the core acquisition strategies of Hines in both Russia and Poland.
Hines has been present in the Russian and Polish real estate markets since 1992 and 1996, respectively. In Russia and Poland combined, Hines manages over US $2.0 billion of property assets, including $1.25 billion owned or controlled by Hines and its affiliates, as of December 31, 2011.
Jeff Hines, President and CEO, said, "Russia and Poland have long been markets where Hines has enjoyed competitive advantages and exceptional performance. In emerging markets that are undersupplied in all asset classes, the execution of Hines' best practices by dedicated, local and long-tenured management teams results in a strict approach to risk management that is flexible for local conditions and ultimately delivers better performance for our investors."
The fund has already allocated equity to three new projects in Russia in the retail property sector. These projects include outlet mall developments in St. Petersburg and Moscow, and a big-box retail development in Moscow.
The outlet projects are the second and third such developments of Hines in Russia, providing valuable retail space to tenants that is in high demand. Together, these projects are the first such retail outlet developments in Russia, and ultimately will provide a further retail option to Russia's enthusiastic consumers.
Timmins said, "In addition to our successful office developments, we are very excited about the development prospects in Russia in the retail, warehousing and residential property sectors, which take advantage of the growth of the Russian middle class and the rapidly growing consumer spending power."
Godzisz added, "Poland remains a growing and vibrant economy in spite of European economic headwinds. We continue to believe that very interesting opportunities for investment in the office, retail and mixed-use sectors are available in multiple cities throughout Poland."