Global real estate manager TIAA Henderson Real Estate has picked up a valuable mandate from the $70 billion giant AustralianSuper to invest in the London office market.
While yields in the British capital have been running hot, the group is likely to deploy the funds in pockets of value outside the top towers.
When AustralianSuper moves it tends to make big plays. Last December, it made its first direct investment for its international property portfolio by teaming up with Hermes Real Estate Investment Management, on behalf of The BT Pension Scheme, to buy a half stake worth £270 million ($487m) in regional shopping centre in Milton Keynes, north of London.
The TIAA Henderson venture, known as TH Real Estate, is based in London but has a large presence in Australia.
TH Real Estate is a joint venture between New York financial services group TIAA-CREF and Henderson Global Investors, one of Europe’s largest investment managers.
The merged real estate platforms manage property assets totalling $US71bn, making its presence felt in the space dominated by CBRE Investors and LaSalle Investment Management.
TIAA-CREF has deep ties already in Australia, notably a strategic partnership with Mirvac Group, and it also has a co-investment with the Future Fund in a New York office tower.
Henderson took the Future Fund to Britain, where the fund made its first offshore play — the Bullring centre in Birmingham, since sold. In 2012, TIAA-CREF and the Future Fund jointly purchased a 33-level office block in New York.
TIAA-CREF had invested in agricultural assets in Australia and last year it bought an office block, 20 Hunter Street in Sydney, for about $96m.