UK – BlackRock and Deutsche Bank's real estate asset manager RREEF are to merge two of their funds to create a £2.4bn (€2.9bn) property unit trust.
The deal, hailed as a "landmark merger" by BlackRock's head of international real estate business Marcus Sperber, has seen the company's UK Property Fund and the existing RREEF UK retail, office and industrial property funds receive sign off by unit holders to merge.
As a result, BlackRock's UK fund will grow in size by £335m, absorbing 27 holdings in central London offices, as well as retail warehouses and offices in the South East of England.
Commenting on the deal, Sperber – also fund director of the merged fund – said: "This is a landmark merger for the UK property funds industry, bringing together two well-known names and offering several benefits for investors.
"With over £2.4bn and a 20-year track record of strong performance, BUKPF has the scale to invest in quality assets on behalf of over 400 institutional clients that might not be available to other funds."
Alongside the 27 new holdings, the merger with RREEF will also see a further 64 clients join BlackRock.
The unit trust, popular among UK pension funds, has returned 5.5% over the past decade and recently bought a London office and a retail warehouse in Enfield, an outer London borough.
BlackRock remains by far Europe's largest single manager of institutional assets, while RREEF, as the real estate asset management subsidiary of Deutsche Bank, managed €41bn in assets at the end of September.
Exclusive talks between Deutsche and Guggenheim Partners to buy RREEF ended in June and formed part of a review by the bank of its long-term asset management strategy.
The bank has since announced that asset and wealth management will now form part of its "fourth business pillar" and that the subsidiaries – including RREEF, DWS Americas and DB Advisors – will be integrated into a new Asset & Wealth Management division.