PGGM won over by SLI's responsible investment credentials

NETHERLANDS/UK - PGGM, the Dutch pension fund asset manager, has invested €75m in a UK shopping centre fund managed by Standard Life Investments.

PGGM, the provider of the large Dutch healthcare pension scheme PFZW, made the investment to gain exposure to the UK sub-sector, but it said it was also attracted to the fund manager's responsible investment credentials.

Mathieu Elshout, senior investment manager at PGGM, said: "We were greatly attracted to Standard Life Investments' UK Shopping Centre Trust.

"This investment gave us immediate and 100% access to an unleveraged portfolio of prime assets in an important sector of the UK commercial property market.

"While the portfolio is essentially core in nature, the assets are actively managed, and the management team demonstrated a deep understanding of the market."

Elshout said Standard Life Investments adhered to PGGM's responsible investment policy for real estate, which integrates material environmental, social and governance (ESG) issues into its property strategy.

She said this clearly demonstrated Standard Life Investments' commitment to socially responsible investment (SRI) principles.

Ed Jenkins, fund manager for the Standard Life Investments UK Shopping Centre Trust, said his company had a longstanding commitment to developing and managing real estate on an environmentally sustainable basis.

"PGGM is the first property investor with which we have agreed specific reporting requirements on sustainability issues," he said.

"We were quick to agree to this, as it's already in line with our existing practice."

The fund, launched in 2005, is a closed-end vehicle domiciled in Jersey.

Its total underlying assets were valued at approximately £1.2bn (€1.3bn) at the end of March 2010.

Key assets include Brent Cross Shopping Centre in London and Churchill Square in Brighton.

The investment objective is to outperform the shopping centre sub-sector of the Investment Property Databank universe over a rolling three-year period, which Standard Life Investments claims has been achieved over all time periods since launch.

Jenkins added it was a testimony to the quality of the fund that PGGM had chosen to invest.

"PGGM are without doubt one of the biggest investors in Europe, both in terms of assets and reputation," he said.

"They have meticulous standards of governance and due diligence."

Jenkins said Standard Life Investments was committed to encourage best-practice environmental, ethical and social procedures in the investment, development and management of its property portfolio.

"This will contribute to reducing our impact on the environment," he said.

"Although the environmental performance of any building is essentially driven by its occupants, we as owners and managers have put in place the recording and monitoring systems needed to engage our tenants in processes that will mitigate the environmental impact of their business." 

He said a good example of this engagement working in practice was the continued high level of recycled waste, 70%, achieved at the shopping centres in the portfolio, with the managed office estate increasing from 22% in 2008 to 33% in 2009.