Rockspring Property Investment Managers LLP ("Rockspring") announces that it has secured a new mandate from the National Pension Service of Korea ("NPS"), the world's fifth largest pension fund, to invest up to US $1 billion into commercial property across Europe.
Following a competitive pitch process, Rockspring won the discretionary core plus mandate to invest US $400 million of equity, totaling US $1 billion of spending power including debt, across all commercial property sectors. It will invest across continental Europe and the UK, from mature western European markets through to the more emerging markets of Central Europe. Although there are no stringent geographical or sector weightings, the fund is expected to have a significant exposure to retail and office assets, with a smaller focus on the industrial sector. Lot sizes are expected to be between US $65 mln. to US $150 mln.
With a strong focus on cash flow generation, capital preservation and active asset management, it will target returns of 10%+ with a strong portion of this coming from income.
Rockspring's relationship with NPS started in 2007 when the pension fund invested in Rockspring TransEuropean IV fund, the fourth in a long-standing series of diversified closed-ended funds. Following this, in 2009 Rockspring was asked by NPS to identify possible acquisitions of London trophy assets and subsequently launch and manage the NPS Central London Property Partnership on its behalf. Acquisitions to date include Grosvenor Place for £85 million and 88 Wood Street for £183 million. This mandate was recently extended to include continental trophy assets and has since been renamed the NPS Real Estate Projects Limited Partnership. The first continental acquisition, O'Parinor Shopping Centre, was secured last month for 223 million.
NPS European Real Estate Value Fund will remain a separate vehicle to the NPS Real Estate Projects Limited Partnership, reflecting their distinct investment strategies and objectives.
Robert Gilchrist, Chief Executive of Rockspring, said: "Over the last three years we have created a strong relationship with NPS as it has been expanding its exposure to the European commercial property sector. We are delighted in the faith NPS has shown in us in offering us this new mandate.
"The Fund will leverage off our extensive transaction and asset management teams all over Europe, and will target higher yielding, core-plus assets with secure income streams, where we can create value through asset management initiatives. We already have a good pipeline of deals for the Fund and hope to announce our first acquisition shortly."