Hines Said to Offer $5.5 Billion Real Estate Portfolio Sale

  • Non-publicly traded REIT owns all or part of 43 properties
  • Lazard said to have been appointed to advise on sale

An office building leased by Morgan Stanley in London’s Canary Wharf district is being offered for sale by U.S. real estate company Hines as part of a $5.5 billion property portfolio disposal, according to a person with knowledge of the matter.

The Houston-based company, which manages $89.1 billion, has hired Lazard Ltd. to advise on the sale of the properties in the Hines Global REIT, the person said, asking not to be identified because the details are private. The real estate investment trust, which isn’t publicly traded, owns all or part of 43 properties.

Hines Global REIT said it’s evaluating a sale of assets, a sale or merger, a listing of shares on a national securities exchange or similar transaction in a March 28 filing to the SEC. There’s no set timetable, a spokesman for the firm said. Lazard and Morgan Stanley declined to comment.

U.S. commercial real estate values fell in February, the second consecutive month of declines following a six-year streak of uninterrupted increases, according to an index by Moody’s Investor Services and Real Capital Analytics Inc. Total return from London investment properties, which combines changes in real estate values and rental income, was 1.54 percent in the three months through March, the lowest since 2009, according to data compiled by MSCI Inc.

About 62 percent of the Global REIT properties by value are in the U.S., 15 percent is in the U.K. and the remainder is split between Australia, Germany, Poland, France and Russia, according to Hines’ website. The Global REIT’s stake in the properties for sale is valued at about $5.3 billion, the company said in March, with the remainder held by venture partners in some of the properties.

Morgan Stanley’s office at 25 Cabot Square in London and the headquarters of Gap Inc.’s Old Navy brand in San Francisco are among the buildings owned by the REIT. Other properties held by the investment trust include New City in Warsaw, where tenants include Novartis AG, and Brindleyplace in Birmingham, England where Deutsche Bank AG leases space, according to the the REIT’s website.

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