Lothian pension tenders its real estate

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UK - Lothian Pension Fund is reviewing its real estate investment manager and searching for a firm to handle the fund's asset allocation.

Details of a tender notice issued by Edinburgh Council reveals Standard Life's existing contract to manage a property mandate worth £320m (€470m) is due to expire in March 2008, so the local authority fund is going through the tender process as its policy requires.

This means Standard Life will be considered along with other managers to look after the £2.6bn (€3.9bn) fund's 12% allocation to real estate, which has 75% in direct investments and the remainder in unlisted investments.

More specifically, Lothian has a portfolio of 27 directly-held freehold properties in the UK while the additional assets are placed indirectly in the Henderson Shopping Centre, the Standard Life European property growth and the Standard Life Select property funds.

It is unclear whether this allocation will remain the same but Lothian says the new six-year mandate, with a three-year option to extend, will include UK direct investments to be managed on a discretionary basis along with indirect property exposure which includes overseas investment.

Return on this new mandate is expected to be at least 1% per annum above the IPD annual index, net of fees.

As part of the process, interested parties must declare their total property assets under management - split again into both UK and overseas - as well as showing they have a 10-year benchmarked performance record for UK direct property mandates, along with details of the size and number of UK direct property mandates managed for external clients and pension funds.

Deadline for applications must be submitted by 3pm on October 15 and the tender process is then expected to take six months to complete.

This latest tender process by Lothian follows an announcement last month stating the fund is seeking a manager for a £150m (€222m) global equities mandate.

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  • QN-2570

    Asset class: Direct Real Estate.
    Asset region: Europe excluding Switzerland.
    Size: 150m.
    Closing date: 2019-10-30.

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