UK government pension scheme joins Hines’ European fund

Hines, a real estate investment firm, has closed its European value-add fund with a €80 million commitment from Border to Coast Pensions Partnership, one of the largest UK local government pension scheme investment pools.

The final closing of the fund – Hines European Real Estate Partners III (HEREP III) – in November 2023 exceeded its target, raising over €1.6 billion in equity commitments since its mid-2022 launch. 

Border to Coast is the second local government pension scheme investor to partner with Hines in recent years since Greater Manchester Pension Fund committed to the Hines US Property Partners in 2022.  

With 35 investors, including existing and new partners like Border to Coast, HERE III has allocated over €300 million of equities to establish a diverse portfolio in three markets. 

The investment period is set to continue until mid-2026, prioritising purpose-built student accommodation, distribution logistics, and sustainable office spaces. Hines anticipates significant rental growth opportunities in these sectors. 

Notably, the predecessor fund, Hines European Value Fund 2, received a five-star rating from GRESB, an ESG-focused organisation providing benchmarks for investors and managers, highlighting its commitment to ESG considerations.

Alistair Smith, head of real estate at Border to Coast, said: “Due diligence has revealed that Hines and the HEREP III can help us deliver the objectives of our global value-add fund, providing investment capital appreciation and diversification for our partner funds.”  

Paul Campbell, real estate portfolio manager at Border to Coast, highlighted the company’s strong focus on ESG and the impact it will have on asset values in the longer term.

© 2023 funds europe

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