TIAA-CREF and Swedish pensions in €4bn European JV

The pan-European office platform will be seeded with office properties already owned by TIAA-CREF and AP1/AP2 as well as a further €2 billion in additional investment over the next three years.

TIAA-CREF Global Real Estate and the Swedish National Pension Funds AP1 and AP2 have joined forces to create a €4 billion pan-European office investment platform.

The joint venture will be seeded with existing office properties owned by the TIAA General Account, AP1 and AP2, creating an initial platform valued at €2.2 billion.

The newly formed investment vehicle will be named Cityhold Office Partnership. TIAA-CREF will hold a 50 percent interest in the vehicle and each AP fund will hold 25 percent. The 15 seed assets, (9 contributed from the TIAA General Account and 6 from AP1 and AP2), total 2.7 million square feet and include landmark assets such as 12-14 New Fetter Lane and One Kingdom Street in London, Tour Areva in Paris, and Atlantic Haus in Hamburg.

The platform will also begin an active investment program with new capital from the TIAA General Account, AP1 and AP2 targeting an additional €2 billion of investment over the next 3 years.

TIAA-CREF owned London-based real estate asset management firm, TH Real Estate, brought the parties together and will manage the vehicle on the investors’ behalf, providing investment and asset management services.

TH Real Estate will primarily target core investments in Tier 1 cities such as London, Paris, Munich, Hamburg, Frankfurt and Berlin for the platform. However, the firm will look to invest in value-add opportunities such as leasing, renovation and development opportunities in Tier 1 cites, or stabilized core investments within Tier 2 cities that include Madrid, Milan and Amsterdam, among others.

“Our investing partnership with AP1 and AP2 – like-minded investors who share our long-term investing horizon and focus on high quality assets – enables us to further diversify TIAA’s existing European office portfolio across asset, tenant and market exposures while establishing a broader platform to expand our European investments,” commented Phil McAndrews, senior managing director and chief investment officer of TIAA-CREF Global Real Estate.

The JV extends a long-term relationship between TIAA-CREF and AP2, which have been co-investing together since 2011 in various real asset strategies including TIAA-CREF’s timberland strategy and two farmland investment partnerships spanning North America, South America and Australia.

The transaction is expected to close in September.