GLOBAL - The National Pension Service (NPS) of Korea has committed a further $400m (€306m) capital to Rockspring Property Investment Managers to invest in European real estate markets.
The fifth-largest pension fund in the world has already made a number of high-profile acquisitions in Europe through Rockspring.
The new capital is part of a separate mandate and will allow the fund manager to make as much as $1bn of real estate investments by gearing the strategy up to 60%.
The discretionary core-plus mandate, which Rockspring won following a competitive pitch process, will allow investment across all commercial property sectors and in both mature western markets and the emerging markets of central Europe.
Although there are no stringent geographical or sector weightings, the fund is expected to have a significant exposure to retail and office assets, with a smaller focus on the industrial sector, while lot sizes are expected to be between $65m and $150m.
Rockspring will target returns of more than 10% with a strong portion of this coming income, and focus on cash-flow generation, capital preservation and active management.
Rockspring's relationship with NPS started in 2007 when the pension fund invested in the Rockspring TransEuropean IV fund, the fourth in a series of diversified closed-end funds.
In 2009, Rockspring was then asked by NPS to identify possible acquisitions of London trophy assets and subsequently launch and manage the NPS Central London Property Partnership on its behalf.
Acquisitions to date in London include Grosvenor Place for £85m (€101m) and 88 Wood Street for £183m.
The mandate was recently extended to include continental trophy assets and has since been renamed the NPS Real Estate Projects Limited Partnership.
The first continental acquisition, O'Parinor Shopping Centre, was secured last month for €223m.
The new mandate, the NPS European Real Estate Value fund, will remain a separate vehicle to the NPS Real Estate Projects Limited Partnership, reflecting distinct investment strategies and objectives.
Robert Gilchrist, chief executive at Rockspring, said: "The fund will leverage off our extensive transaction and asset management teams all over Europe and target higher yielding, core-plus assets with secure income streams, where we can create value through asset management initiatives.
"We already have a good pipeline of deals for the fund and hope to announce our first acquisition shortly."
