TIAA-CREF, the pension-fund manager for employees of non profit institutions, said French insurer CNP Assurances (CNP) will invest in three of its German shopping centers that are valued at $1.2 billion.
The companies will set up a joint venture to own the properties, TIAA-CREF said in a statement yesterday without providing financial details. The New York-based company acquired Berlin’s Gropius Passagen in 2012 and Munich’s Perlach Einkaufs Passage in 2011 and developed the Erlangen Arcaden in 2007.
“Germany’s improving economy and limited supply of retail space continue to make these properties attractive assets,” Tom Garbutt, TIAA-CREF’s head of global real estate, said in the statement. The joint venture will allow the company “to further diversify our portfolio and take advantage of investment opportunities.”
Pension funds and insurance companies are investing in German commercial properties to boost returns as low interest rates make government bonds less attractive. Investors bought 19 billion euros ($26 billion) of offices, shops and warehouses in the first nine months of this year, 28 percent more than a year ago, according to data compiled by broker Jones Lang LaSalle Inc. (JLL)
In June, TIAA-CREF and Henderson Group Plc (HGG) agreed to combine their European and Asian real estate businesses to form a venture with 13 billion pounds ($21 billion) of assets under management.
TIAA-CREF will manage the German shopping centers for the joint venture. The company already operates assets in the U.S. for sovereign-wealth funds and institutional investors, according to the statement.
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