PGGM has backed a London office venture managed by Legal & General.
Together, the Dutch pension fund manager and the UK institutional manager will invest an initial £375m (€502m) in office properties in the UK capital.
Legal & General Property will source assets for the partnership and act as fund manager.
A £67m property, in London’s Soho district, has been bought at a 4.7% yield as a first investment for the partnership.
The venture marks the second time the pair have entered a joint venture, having earlier this month bought the Bishopsgate Long Term Property Fund Unit Trust for £370m, giving it access to a portfolio of 24 commercial properties.
That deal also saw Legal & General provide a £142m facility to the partnership at a 40% loan-to-value ratio.
The joint venture said it would typically invest in assets priced between £30m and £90m and in need of refurbishment and renovation.
Investments, it added, would be focused on central areas of the UK capital under regeneration.
London has seen significant change in recent years, with new districts emerging and the city’s ongoing Crossrail project creating pockets of opportunity for developers and investors.
L&G said the joint venture had been set up to source “attractive investments” with “superior growth prospects”.
With a focus on impact investment, the partnership will look to integrate material environmental, social and governance aspects throughout its assets.
Mathieu Elshout, senior investment manager at PGGM, said the latest joint venture allowed the fund to “take advantage of the opportunities that exist in the UK”.
He said the JV was also an example of PGGM’s ambition to have a “high degree of control” over investments.