The UK's Border to Coast Pensions Partnership, the largest UK Local Government Pension Scheme (LGPS) pool, has commmited €80 mln to closed ended European value add fund, Hines European Real Estate Partners III (HEREP III), which held a final close at the end of November.
The disclosure comes since the fund exceeded its target of €1.5 bn with €1.6 bn. The total number of investors in the fund is now 35, with a mix of existing and new investors, such as Border to Coast Pensions Partnership, in addition to Hines' co-investment.
Border to Coast is based in Leeds and makes investment decisions for 11 local government pension funds who between them have over €46bn of AUM. It becomes the second LGPS investor to invest with Hines in recent years following Greater Manchester Pension Fund which committed to the Hines US Property Partners in 2022.
Alistair Smith, head of real estate at Border to Coast, said: 'After carrying out extensive due diligence, we believe that Hines and the HEREP III team have the capability to help us deliver the objectives of our Global Value-add fund, providing investment capital appreciation and diversification for our Partner Funds.'
Since its inception HEREP III has allocated over €300 mln of equity to assemble an initial portfolio of four assets in three markets. The investment period for the fund is expected to continue until mid-2026 and will prioritize three key sectors: purpose-built student accommodation (PBSA), distribution logistics and highly sustainable office spaces in prime locations. Hines believes these sectors have significant unmet demand and present opportunities for ongoing rental growth.
Paul Campbell, real estate portfolio manager at Border to Coast, said: 'Border to Coast has strong focus on environmental, social and governance factors (ESG) and the impact this will have on asset values in the longer term. Partnering with Hines, a real estate specialist investment manager with strong ESG credentials, will enable us to deliver for our Partner Funds.'
