EUROPEAN NEWS: Core control

LaSalle Investment Management is set to announce from this summer a series of separate account mandates with European investors looking for core and core-plus property. 

Continental European investors are changing the way they look at real estate, increasingly looking for greater control over their investments, at the same time as moving down the risk spectrum towards core and core-plus assets. 

LaSalle’s Paris-based head of Europe, Simon Marrison, said the continental Europe core and core-plus business would be one of three main pillars of growth for the firm, the other two being UK core and core-plus investments, alongside UK and European value added and opportunistic vehicles. 

“Investors want a little more control to choose asset allocation, and therefore to employ a separate account manager,” he said. LaSalle, he added, was in advanced talks with domestic German and French investors as they sought a European real estate strategy. 

Susan Lloyd-Hurwitz, managing director, went on to say the firm was working on “three to four” such initiatives representing “major moves” in the separate accounts business. “Apart from greater control, investors are very conscious of the quality of real estate and of environmental regulations,” said Marrison. “This is very important in the minds of investors today.” In addition to building a European platform, LaSalle is raising a UK open-ended core fund. 

The requirement among many LPs for core and core-plus property is also impacting LaSalle’s next major play in the value-added, opportunistic sector. “Yes there is a lot of core, core-plus money coming into the market, but at the same time there is an opportunity to create assets in the UK, France and Germany to sell to that,” said Marrison.  

In potentially renovating and selling improved assets to core investors, LaSalle is picking up on a strategy that is gaining momentum in Europe. London-based fund manager MGPA is also believed to be raising a fund catering to such demand, according to PERE sources.