REAL ESTATE – Stichting Pensioenfonds ABP, Europe’s largest pension fund, is to invest in French office real estate in a tie with the Duke of Westminster’s Grosvenor group.
“We have not been active in the office market since 2002 but, expecting stronger occupier demand and a gradual recovery in rents, we agreed a programme with Dutch pension fund, ABP, to invest in the French office market,” said Grosvenor in its 2005 annual report.
The London-based firm added that it would manage the joint investment. The size and financial terms of the deal were not disclosed.
Grosvenor reported that its total return in 2005 was 15.1%, up from 13.8% in 2004. Total assets under management rose to £9.1bn compared to £7.7bn in 2004. Its wholly owned assets went to £4.7bn.
But such growth would “not continue indefinitely” – although there are good reasons why investing in property has become so popular, the Duke said in his review.
“There has been a permanent shift into the sector by institutional investors and relatively stable bond yields and interest rates imply low volatility in property yields in the short term.”
Grosvenor also highlighted the strong demand for investment property which had moved towards “unsustainable territory”. However its saw no evidence that an abrupt change is likely.
Grosvenor added that finance director Jonathan Hagger and UK CEO Stephen Musgrave are to retire and leave the company respectively. They would be replaced by internal appointments Nick Scarles and Mark Preston.
