Border to Coast Pensions Partnership has committed €80m to Hines’ latest European value add real estate fund.
Hines, a global real estate investment, development, and property management company, said the European Real Estate Partners III (HEREP III) fund had raised over €1.6bn of equity commitments since launching in mid-2022, closing at the end of November 2023.
Border to Coast is the second LGPS investor to partner with Hines in recent years following Greater Manchester Pension Fund, which committed to the Hines US Property Partners in 2022.
Alistair Smith, head of real estate at Border to Coast, said: “After carrying out extensive due diligence, we believe that Hines and the HEREP III team have the capability to help us deliver the objectives of our Global Value-add fund, providing investment capital appreciation and diversification for our Partner Funds.”
Since its inception, HEREP III has allocated over €300m of equity to assemble an initial portfolio of four assets in three markets, Hines said.
The investment period for the fund is expected to continue until mid-2026 and will prioritise three key sectors: purpose-built student accommodation (PBSA), distribution logistics and highly sustainable office spaces in prime locations.
Hines said it believed these sectors have “significant unmet demand and present opportunities for ongoing rental growth”.
Earlier this year, the predecessor fund to HEREP III, Hines European Value Fund 2 (HEVF 2), was awarded five stars from GRESB, an independent ESG-focused organisation which provides peer benchmarks for investors and managers.
HEVF 2 increased its score from 94 to 100/100, placing the fund in its peer group of 65 for European, non-listed, value-add, closed-ended vehicles.
Paul Campbell, real estate portfolio manager at Border to Coast, commented: “Border to Coast has strong focus on environmental, social and governance factors (ESG) and the impact this will have on asset values in the longer term. Partnering with Hines, a real estate specialist investment manager with strong ESG credentials, will enable us to deliver for our Partner Funds.”
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