PREI bags £280m John Lewis mandate

The real estate investment management arm of Prudential Financial has won a competitive tender for a mandate to manage the UK retailer’s existing property investments and to grow it further.

Pramerica Real Estate Investors (PREI), the real estate investment management arm of Prudential Financial, has won a mandate from the pension trust of UK retailer John Lewis to manage and grow its property portfolio.

PREI announced today that, following a beauty parade of potential firms, it was chosen to manage the John Lewis Partnership Pension Trust’s existing £180 million (€230.5 million; $282.6 million) of direct and indirect assets – all of which are in the UK – and to increase the portfolio to £270 million over time.

PREI said that part of the mandate would be to shift John Lewis’ real estate portfolio more towards direct investments.

The mandate would also entail a shift from benchmarking performance against an IPD benchmark target and closer to a “real return” benchmark target.

The mandate builds on PREI’s current assets and commitments under management in the UK, for both UK and international investors, of £950 million. It was this prior experience that was highlighted by John Lewis’ pension investment manager Adrian Mitchell as contributing to its decision to appoint the firm.

He said: “Pramerica offers a wealth of experience in the UK property investment market, and I am confident that they have the expertise to maximise the value of our property portfolio on behalf of our pension fund, as we increase our weighting to this important asset class.”