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CalPERS buys into German real estate

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GERMANY – CalPERS, the largest US pension fund at 166.3 billion dollars (136.8 billion euros), has bought a commercial property in Frankfurt for 14 million dollars.

The move was part of a series of real estate acquisitions by the fund, whose current real estate portfolio is short of its target weighting.

CalPERS, the California Public Employees Retirement System, said its bought the 129,000 square foot single storey complex and warehouse building in April after it was vacated after the bankruptcy of former owner Exodus.

It said it “plans to reposition the property for use by a corporate or enterprise user” and it added it “projects an unleveraged internal rate of return of 31% over three years”

“The property consists of a highly improved, former Exodus data center. Exodus invested roughly 52 million dollars to convert this former single storey office and warehouse building,” the fund said.

“As such, our purchase price, which includes all the above-standard data center infrastructure, represents a fraction of the replacement cost.”

The Sacramento-based scheme’s real estate portfolio is currently worth 11.6 billion dollars, or seven percent of the total portfolio. The target allocation is nine percent to real estate.

Other recent real estate buys include properties in California, Texas, New Jersey, Ohio and Minnesota for a combined 44.7 million dollars.

Separately, the fund has appointed Darryl Watson as its new member services division chief. Ron Kraft takes over responsibility for CalPERS’ eight regional offices.

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  • QN-2546

    Asset class: Real Estate Equity Fund (non listed).
    Asset region: Europe.
    Size: Total CHF 600m, approx. CHF 100-300m per fund investment.
    Closing date: 2019-06-28.

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