Trendlines over headlines at European pension funds

The region's pension managers say they are focusing on demographics, demand shifts and tech trends - as reflected in some of their largest deals this year.

Currency headwinds, geopolitics and trade wars have dominated the media, but European pension funds say they are investing for long-term trends driven by changes in demographics, technology and underlying tenant demand.

Tenants are demanding more services with their space, leading many European pension managers to take a stake in operating platforms to maximize the value of the real estate it already owns. Meanwhile, advances in technology continue to drive the e-commerce craze, making investors either choose property that will benefit – such as logistics – or invest in emerging markets where e-commerce infrastructure has yet to catch up.

Multifamily residential in city centers continues to be sought after as the population clusters in urban areas.

Virtuous Retail mall acquisitions

Buyer: APG and the Xander Group

Seller: not disclosed

Price: $500m

What to know: In September, retail property development platform Virtuous Retail South Asia, a JV between APG and investment firm the Xander Group, acquired two malls and a retail development project in India. While retail remains a challenging sector, India, with limited e-commerce penetration, still presents opportunities, according to Foortse.


UK build-to-rent investment in London’s Wandsworth

Buyer: Legal & General and PGGM

Seller: Legal & General

Value: £500m ($645.5m; €580.6m)

What to know: In May, investment management firm Legal & General and Dutch pension fund PGGM acquired two adjacent sites in Wandsworth for a residential-led development project. The site will be home to the joint venture’s flagship build-to-rent project and provide around 1,000 homes.


Bouwinvest joins LOGOS, LaSalle, Ivanhoé and CPPIB to buy industrial property 

Buyer: Bouwinvest, LaSalle, Ivanhoé Cambridge, CPPIB and LOGOS

Seller: solar panel producer REC

Price S$585m ($432.93m; €378.49m)

What to know: Dutch pension manager Bouwinvest joined industrial property specialist LOGOS in January to buy an industrial asset in Singapore. Along with Bouwinevest and LOGOS, the venture also included Ivanhoé Cambridge, Canada Pension Plan Investment Board and three unnamed investors represented by LaSalle Global Partners.


citizenM Hotels

Buyer: GIC

Seller: APG

Price: €750m

What to know: APG sold a 25 percent stake in its global hotel business citizenM to Singapore sovereign wealth fund GIC in April 2019. The transaction led to citizenM being valued at €2 billion and gave the three-way joint venture among GIC, APG and private equity firm KRC Capital a total of €750 million of equity. “More and more of our peers are doing [platform investments],” APG head of European property investment Robert-Jan Foortse tells PERE. “This is about real estate becoming much more operational to manage.”


PFA and POBA JV seek alternatives

Buyer: PFA and POBA JV

Seller: TBA

Price: Maximum investment target of DKr10bn ($1.5bn; €1.3bn)

What to know: Danish pension fund PFA and South Korean pension fund POBA have entered into a joint venture to target alternative real estate assets such as data centers, self-storage and other niche property types, according to media reports. The joint venture partners intend to invest a maximum of DKr10bn, which includes any debt financing. PFA declined to comment.