Blueprint: Boston Capital sets up shop in Europe for US fundraise, Allianz buys big in Paris, Norges shakes up leadership

Boston Capital finds US fundraising success with European investors; Allianz gets back to office investing in a big way; Norges Bank reshuffles its real estate leadership; and more in today's briefing, exclusively for our valued subscribers.

They said it

“Shorter and flexible leases are often provided in combination with other services that generate additional income for the landlord, which in turn helps strengthen the income and can lower or reverse the negative impact of downward valuation pressures. The pandemic crisis is reinforcing the trend towards more flexible leases.”

Christoph Wagner, director of debt strategies at Nuveen Real Estate Europe, shares his views on flexible offices leasing with sister publication Real Estate Capital.

What’s new?

First up: an investor request

Perspectives is our annual study of how institutional investors will approach private markets over the coming year. The survey – which is anonymised – takes less than 10 minutes and respondents will get a copy of the full results. A $5 donation to UNICEF will be made for every completed set of responses. Click here to participate.

Big in Europe

Why would a US firm domicile a dollar-denominated, US-focused fund outside the US? If you guessed to attract non-US investors, you might be onto Boston Capital’s thinking for Income and Value US Apartment Fund II. The Massachusetts firm held a first close for the Luxembourg-housed vehicle on $133 million, all from European institutions. Other managers looking to break into the fund world might want to do the same. As more investors consolidate their manager relationships and focus on direct investment, Boston Capital Real Estate president Mark Dunne says often the most compelling reason for them to commit to a fund is to invest outside their home market.

A Parisian office affair

As some investors remain cautious about returning to office investment while so few employees have returned to their places of work, Allianz Real Estate just made its largest bet on European offices yet by acquiring two prime buildings in the iconic Parisian business complex Citylights. The acquisition, made on behalf of several Allianz Group companies, cost around €500 million. With the two Citylights assets, the company’s French real estate equity portfolio now stands at €8.7 billion in assets under management, representing 17 percent of its €52.3 billion European real estate portfolio.

Norwegian reshuffle

The world’s largest sovereign wealth fund is changing up its real estate leadership. Karsten Kallevig, chief investment officer of real estate at Norges Bank Investment Management, has been named special advisor to chief executive Nicolai Tangen, with a focus on real assets. Rather than hire a new CIO of real estate, however, NBIM – which oversees investments for Norway’s oil fund, the Government Pension Fund Global – will be recruiting a chief real assets officer to oversee investments in both real estate and unlisted renewable energy infrastructure. Kallevig will be working closely with the new officer, who will be named next month.

Stop, download and listen

PERE editor Evelyn Lee was the featured guest on this week’s episode of the Work Bold podcast with host Caleb Parker. She discusses her recent deep-dive piece on how the valuation of flex office assets is evolving, while also touching on other interesting points not covered in her story. Previous guests of the podcast have included Annie Rinker of Hines, James Goldsmith of AXA Investment Managers and Joanna Turner of Canada Life Asset Management.

Data snapshot

Logistics lull

More than one million square feet of Hong Kong logistics space could return to the market this year as slumping trade hampers warehouse demand, JLL tells the South China Morning Post.

Trending topic

Back in action

Last week brought welcome respite to the UK’s open-end property fund industry. The Royal Institution of Chartered Surveyors gave the nod to independent valuers to remove the material uncertainty tag on most real estate valuations, as lockdowns eased. The move comes six months after a wave of UK property funds – totaling an estimated $8 billion – suspended trading due to valuation challenges. Several managers, including St James Place, Columbia Threadneedle, and Legal and General Investment Managers plan to reopen all their UK property funds in the coming weeks. Meanwhile, firms such as Aberdeen Standard Investments are reportedly choosing to wait, leery of retail and hospitality valuations and the potential liquidity risk they might face once suspensions are lifted.

People moves

Next up

When Philip La Pierre [his LinkedIn profile here] takes the reins as LaSalle Investment Management’s chief executive in Europe on October 1, he will probably aim to hold the position longer than his predecessor, Karen Brennan [her LinkedIn here], who had the job for a little over a year. Then again, he would be so lucky as to follow her path, as she is now chief financial officer of the firm’s parent company, Jones Lang LaSalle. La Pierre has been LaSalle’s chief investment officer of continental Europe since July 2018 and helped to grow the firm’s AUM by 30 percent since then.

Two for one

Paul Brundage, executive vice-president of Europe and Asia for Oxford Properties Group, is departing the property company for a role with its parent company, the Ontario Municipal Employees’ Retirement System. He will be deputy chair of investments for the pension investor. Two people have been tapped to take his place, Joanne McNamara [her LinkedIn here], who will be managing director and head of Europe, and David Matheson [his LinkedIn here], who will be managing director and head of Asia-Pacific. The bifurcation of the position is the result of OMERS’ increased focus on those two regions.

Investor watch

APG, Aware Super dive into hospitality

Hospitality is not dead, at least not for APG and Aware Super. The Dutch pension investor and the Australian superannuation fund have committed additional capital to their joint investment in City ID, a Netherlands-based aparthotel operator. With the cash infusion, the company will expand its portfolio from 250 extended stay units in Amsterdam to capital cities throughout Europe and a total portfolio valuation of €500 million over the next four years.

This week’s investor meetings

Tuesday, September 22

Wednesday, September 23

Thursday, September 24

Friday, September 25

Today’s letter was prepared by Kyle Campbell with Evelyn LeeArshiya Khullar and Eugenia Jimenez contributing

Subscribe now and get Blueprint delivered to your inbox every week. To find out how, email our team: