US giant huddles up to London
UK - Mark Wood, managing director of US pension fund giant TIAA-CREF's global real estate business, has revealed the newly-launched London office is an attempt to "make sure we are as close to the market as we can be."
The new office, the launch of which was announced yesterday, has been set up to allow officials to sniff out more direct real estate investments in the UK and continental Europe, to add to the $4bn the fund already holds in the region. (See earlier story IPE.com: 'TIAA-CREF hunts real estate via London office')
"By having an office on the ground, we think we are better positioned to have even closer contacts with the local markets, and be viewed more as a local investor rather than a US foreign investors," said Wood.
The new office will source retail, office and industrial properties in the UK and in continental Europe, though this emphasis might shift in terms of where the fund sees the best opportunities.
The fund says it is comfortable to invest alone in the UK, France and Germany, but it is looking for partnerships with local pension funds or other institutions, property companies, and developers.
Paul Wilson, a former head of retail investments at Invesco Real Estate and now director, real estate investment management, Europe, TIAA-CREF global real estate, who joined the company on August 1 to lead the new operation, told IPE today: "Where we have traditionally in the past gone into the markets we have gone in with a joint venture partner, but as we get more comfortable we are able to do it directly, and clearly we will continue that mode of operating."
Despite many European investors now seeking investment opportunities in the US, Wood thinks the timing of the move is still right: "We feel like it is the right place for us to be and it corresponds nicely with our historical investment programme."
New value-added and long term direct real estate investments can be obtained at various points in the different market cycles, according to Wood.
The office has no target at present though, historically, the fund's investment programme in the region has approximated $600m per year.
Paul Wilson added the office will identify where it sees long-term good fundamental economic value from the perspective of country and property type.
The office will not look at Russia or other central and Eastern European markets, but TIAA-CREF has an objective to build a more global real estate holding over time.
"This office in particular is focused on the UK and Europe. We have in other parts of our operation looking, on an ongoing basis, to expand eastwards," concluded Wood, who added an Asian office might not be out of the question.
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