The Universities Superannuation Scheme (USS) is to buy the 2.9 million square foot Equiton Industrial Portfolio from a consortium including Prupim, the property arm of the Prudential, and London-listed Brixton, for £196 million ($323 million; €227.5 million) in an all-equity deal.
The portfolio was poised to go to Westbrook Partners, one of a number of private equity firms that had courted assets managed by the troubled London REIT Brixton, but the deal, reportedly worth £225 million, fell through. AEW Europe was among the firms to acquire other warehouse portfolios from the company.
Graham Burnett, head of property at USS, noted the deal helps rebuild its property portfolio following a major sales initiative in 2006 and 2007. “‘The purchase of the Equiton portfolio will take the fund's investment activity so far in 2009 to in excess of £350m. Further opportunities are being pursued,” he said.
USS has long been an investor in third party managed funds as well as a direct investor, however the £23 billion pension has been keen of late to reduce its exposure to real estate from 5.6 percent currently to 2.5 percent according to proprietary data from PERE Connect.
In terms of real estate ,USS has traditionally invested in warehouses and retail only.