Blueprint: CPP and PIF’s hotel bets, PERE’s database update, Alecta’s senior loss

CPP Investments and PIF make commitments to hotels, PERE adds live fundraising charts to its database, Alecta loses a senior real estate executive to a longtime manager, and more in today's briefing, exclusively for our valued subscribers.

They said it

“Because we see the opportunity as pressing now, we have the ability to do single-investor funds that allow us to be more nimble and more expedient.” 

Alfonso Munk, CIO of the Americas for Hines, on the firm’s decision to raise capital  in Mexico and Canada again after a five-year absence. Our full coverage here.

What’s new?

Hotels return, as do investors: CPP Investments’ Andrea Orlandi sees growth opportunities in the hospitality sector as guests seek ‘superior’ experiences (Source: CPP)

CPP and PIF make hotel bets
After a challenging two years, the hospitality sector has gotten a boost from two of the world’s biggest investors. Saudi Arabia’s sovereign wealth fund, Public Investment Fund, has backed a $900 million acquisition of luxury hotel operator Aman Group alongside London-based developer Cain International. Meanwhile, Toronto-based CPP Investments has committed €475 million to a joint venture focused on European hospitality with regional operator Hamilton – Pyramid Europe. Both ventures highlight a growing interest in the asset class as travelers return following the pandemic. “There is significant scope for growth in many markets across Europe, as tourists and local visitors look for superior hospitality experiences,” Andrea Orlandi, managing director and head of real estate Europe at CPP Investments, said in a press release.

Database upgrade alert!
PERE’s revamped database, which we unveiled two months ago, has an important new feature: interactive live fundraising charts. Platinum subscribers can now filter the latest fundraising data by vintage year, strategy and region, and see the data be instantly visualized in chart form. Subscribers will also be able to access the underlying funds data and sort that information by fund, manager, final close year and capital raised. The charts and underlying funds data are also downloadable. To try the new interactive feature for yourself, go to our live data here.

Grab your Passport
Join us this Thursday as PERE Global Passport members meet online to hear the latest economic insights on the second half of the year and beyond. Tom Mundy, head of capital markets strategy & research at global brokerage JLL; Sabina Reeves, chief economist and head of insights & intelligence for CBRE Investment Management; and Kieran Farrelly, head of global solutions, real estate at Schroders Capital, will discuss investment sentiment on the US and China, demographic trends, rising interest rates and the most-favored sectors during this period of volatility. The hour-long webinar on Thursday at 9am EDT/2pm BST/9pm HKT is for members only. If you’re not yet a member, you can join the Passport here to access this and a full lineup of events slated for the coming year.

Trending topics

Still strong, but softening
Life science venture capital funding slowed in the first half of 2022, dropping 18.5 percent year-over-year to $20.8 billion, according to research from global advisory firm Newmark. The reduced funding can be attributed to macroeconomic volatility and lower stock market valuations, particularly for biotechnology companies, which have dampened investor sentiment and expectations. Investment volume in the sector also fell 33.6 percent from last year’s record numbers, thanks to rapid rises in the cost of debt that have forced a repricing across sectors. However, pricing for life science and R&D assets remains at an all-time high, reaching $564 per square foot in H1 2022, a reflection of the supply-demand imbalance that still exists in the largest cluster markets, the report noted.

Going green for greater returns
Renewable energy investments can drive greater returns for real estate managers. That is what a newly formed partnership between Boston-based industrial manager NorthBridge and Green Bridge Energy, a sustainable energy provider, is aiming to achieve. The venture, called NetZero Logistics Company, will invest in solar panels, EV charging stations and battery storage for NorthBridge’s properties. The green energy investments will allow the firm to sell solar power to tenants or to local energy grids to further enhance returns, as well as to stave off obsolescence risk, founders Greg Lauze and Dean Atkins told PERE. Read our full coverage here.

Data snapshot

Record H1 for single-tenant net lease
Single-tenant net lease transaction volume during Q2 2022 was off 20 percent from a record Q1 2022, according to data from global brokerage JLL.  However, H1 2022’s $32.8 billion volume still was more than 20 percent higher than the $27.1 billion during H1 2021, buoyed by continued institutional interest in the space. H1 2022 also was the highest-ever H1 volume for single-tenant net lease deals.

People moves

Striking an Accord with Asian investors
Accord Group Holdings has hired Rita Ling [her LinkedIn here] as managing director in Asia. Ling previously held similar roles at Hong Kong-based Phoenix Property Investors and Invesco Real Estate in Asia. In her new role, she will work with Accord’s senior adviser, Kee Rhee, on Korean market outreach, as well as support Asian investors’ global real estate investment needs and help real estate sponsors in the region to raise capital, according to a press release. The addition of Ling to the team is expected to expand the San Francisco-based capital advisory firm’s investor coverage in a region with growing demand from local investors for global real estate exposure. Asian investors increased their outbound commercial real estate investment by 69 percent year-over-year in 2021 to $54.6 billion, exceeding 2019’s pre-pandemic volume, according to data from CBRE.

Investor watch

Senior Alecta executive moves to Heimstaden
Frans Heijbel [his LinkedIn here], who headed international real assets at Alecta, has left the Swedish pension fund to take a new role at Heimstaden, a Malmo, Sweden-based manager that owns the second largest portfolio of residential properties in Europe. At Heimstaden, Heijbel will be managing director, strategy and M&A, and support the development and growth of the manager’s various businesses, CIO Christian Fladeland said in a press release. Alecta, the largest pension fund in the Nordics, has been a longtime investment partner of Heimstaden and Heijbel will use his knowledge of the platform to help formulate and execute a growth strategy.

This week’s investor meetings

Tuesday, August 23

Wednesday, August 24

Thursday, August 25

Friday, August 26

Today’s letter was prepared by Peter Benson, with Evelyn LeeSamantha Rowan and Christie Ou contributing.