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 bln (US $2.52 bln). The venture will also commence an active investment program with new capital from the TIAA General Account, AP1 and AP2 targeting an additional €2 bln (US $2.29 bln) of investment over the next three 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 stabilised core investments within Tier 2 cities that include Madrid, Milan and Amsterdam, among others.
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 .82 million m² 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.
The transaction is expected to close in September.
Source: TIAA-CREF
