Protego Real Estate Investors has announced that it has entered into a European real estate joint venture with Challenger Financial Services Group Limited, a leading Australian financial services company which has €27.4 billion (A$46 bln) of assets under management.
Under the terms of the agreement, Protego will acquire and manage European property assets on behalf of both Challenger and its investor funds, including the Challenger Diversified Property Group. This is an Australian Stock Exchange listed property trust which floated in October 2006 and currently has a domestic portfolio valued at some A$650 million (€390 million). It has a mandate to invest in core and value-add properties in both domestic markets and internationally, where it has a local joint venture partner.
In addition, Challenger, which has a long term target 30% asset allocation to real estate, is seeking global property investment opportunities for its own balance sheet.
Challenger is seeking to acquire a range of high quality properties diversified across the office, industrial and retail sectors in Western and Central Europe. It will also consider opportunities in the Baltic states and parts of Eastern Europe.
The joint venture with Challenger provides Protego with access to the A$150 billion (€90 billion). Australian real estate investor market, which in 2006 invested in excess of A$4.2 billion (€2.5 billion) of funds in real estate, with over 60% of this invested offshore.
Protego will provide Challenger with a European-based platform from which to source assets, as well as providing transaction services and ongoing asset management of the European portfolio. Protego has engaged King Sturge to provide further access to local property expertise across all mainstream European markets which will dovetail well with Protego's investment management capability.
The Protego team will be headed by Iain Reid and Hugo Llewelyn in London and Peter de Haas in Protego's Netherlands office.
Commenting, Iain Reid, Chief Executive Officer and a Principal of Protego said: "Challenger is a fast growing and dynamic organisation and the fact that it has chosen to partner with us to fulfil its European ambitions reflects well on the strong and experienced team we have put together. In addition we are looking forward to working closely with King Sturge, a well respected real estate operator. Together with other complimentary investment mandates, we anticipate Protego having a minimum investment of €1.0 billion into continental Europe over the next 12 months."
Peter de Haas, a Principal of Protego, added: "We have already identified a healthy pipeline of acquisitions of circa €500 million across our preferred markets of France, Germany, the Nordics and parts of Eastern Europe and expect to be able to announce the completion of our first deals in the near future."
Challenger's Chief Executive Officer, Mike Tilley said: "The European market represents a significant opportunity for our Asset Management division to secure high quality assets that offer return profiles consistent with the investment criteria of both our balance sheet and funds. Securing such a high calibre European partner as Protego is a fantastic outcome."
King Sturge Partner Philip Marsden said: "We are delighted that Protego have chosen to work with us due to the breadth and depth of our pan-European network."