Blueprint: Brookfield shelves Center Parcs sale, NBIM’s first real estate outlay in 2023, APG and Bouwinvest combine for affordable housing

Still searching for the exit

As interest rates remain high, the wait goes on for a mega-manager to successfully make a mega-move in Europe’s hospitality sector. In a telling sign of the pricing gap that still exists between buyers and sellers in private real estate, Brookfield’s sale of Center Parcs has collapsed. The Canadian property giant, which has owned the outdoors-focused resort chain since purchasing it from Blackstone for £2.4 billion (€2.75 billion; $3.07 billion) in 2015, was aiming for a sale of more than £4 billion before abandoning plans to exit, according to the Financial Times.

The lack of many £1 billion-plus deals in the European hospitality sector this year has meant Brookfield faced a sizeable feat to shift a platform with a price tag as high as Center Parcs. The leisure platform was put up for sale in May, and reportedly drew bids from Blackstone, CVC Capital Partners, Aermont Capital, GIC and KSL Capital Partners before the auction closed with no buyer. Earlier in the year it was reported that Brookfield had opened discussions with limited partners around a possible stake sale in Center Parcs, which comprises six holiday parks across the UK and Ireland. A source close to the matter told PERE: “A full sale in the next few weeks looks unlikely now but there are ongoing discussions and Brookfield is assessing its options.”

Easing the pressure

Most institutional investors are needing to wait for the denominator effect on their portfolios to ease, or are having to sell assets to buy again. Not Norges Bank Investment Management, the steward of Norway’s $1.458 trillion sovereign wealth fund. As executives of the investor said at PERE America last week, after approving an allocation increase to real estate of up to 7 percent, it now has an additional $30 billion of equity to deploy.

The issue for NBIM, however, is finding the right acquisitions. Last week’s $746 billion commitment to approximately 810,000 square feet of life science campus space near Boston will have eased the deployment pressure, even if it was the state investor’s first real estate outlay in 2023. NBIM acquired a 45 percent interest in two properties in Cambridge, preleased entirely to pharmaceutical giant AstraZeneca, via a joint venture with mega-manager Blackstone from listed specialist Boston Properties. The deal for the assets at 290 and 300 Binney Street, valuing the venture at $1.66 billion, was conducted with no financing involved – necessary in a market devoid of credit providers.

 Alecta speaks out on Heimstaden investigation

The heat is intensifying on Swedish occupational pension provider Alecta after the country’s Financial Supervisory Authority reported “one or more people to the police” in connection to an investigation in its $4.6 billion investment in Swedish residential real estate business Heimstaden Bostad, according to a statement by the investor. Alecta said this happened after it sought two law firms for “assessments” of any potentially legal violations by the person or persons.

Alecta chairman Jan-Olof Jacke further said: “Since there were different assessments of possible violations of the law and since a police report on insufficient grounds could have negative consequence for both individuals and Alecta’s customers, the board decided not to report to the police, and handed over both investigations to the financial supervisory authority.” The investigation into Alecta’s notably large investment in Heimstaden commenced in September. It followed the firm’s rapid but debt-fuelled growth following the global financial crisis.

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