US: The Ontario Municipal Employees Retirement System (OMERS) wants to invest around US$2bn (EUR 1.66bn) in global real estate. The first stage will be an investment of US $750m in the US market. The pension fund will work via a real estate operating company it owns called Oxford Properties Group.
The Oxford team believe this is a good time to expand into the US. Christopher Voutsinas, executive vice president of corporate development and investment, said: "We now own a strong portfolio of real estate assets in Canada and we want to create a global real estate program for OMERS. The move to investing in the US is the first logical step."
The capital allocated for the US will be invested in two ways. Some will be in joint ventures with domestic operating companies and the rest will be in the form of direct property acquisitions.
Voutsinas said: "I think we will be mainly looking at retail, office and industrial types of assets. This would follow the same line of business that we have in Canada. We might also be looking at some hotels."
OMERS has struck a deal with US-based Glimcher Realty Trust for a joint-venture in the retail sector and the pension fund is likely to approve a US$200m allocation later this month.
The first deal is the $107.1m acquisition of the Puente Hills Mall in the metro area of Los Angeles. OMERS has made a $50m equity investment for a 50% ownership stake.
Glimcher will be looking to acquire regional and super-regional malls around the country for OMERS. But it will face strong competition from the public REITs which have attempted to corner this market.
Oxford hopes that it will be able to find more venture partners in the US for other property types.
After the US OMERS is looking to Europe. This could happen later this year. It is attracted by markets in the UK, France, Germany and Italy. After this the pension fund will consider the Asian market but no timetable has been established yet.
