Hines mulls new European fund, and looking at senior housing

In April, the company made its first foray globally into student housing by acquiring six prime student housing development sites in the UK from McLaren Property, a UK developer. The portfolio comprises six sites in Cambridge, Oxford, Kingston, Aberdeen and Brighton. Hines has entered into the forward funding agreement for the portfolio valued at around £150 mln.

Hines also entered the senior housing sector in the US in April. Hines and Welltower, a US REIT that invests primarily in senior living, joined forces to acquire a development site at 139 E. 56th Street on the northeast corner of Lexington Avenue and 56th Street in midtown Manhattan. They intend to build a 15-storey senior living facility with a retail component on the ground floor.

A new European fund is also in the cards this year, according to Lars Huber, co-CEO for Hines Europe. Details have not yet been released, but Huber noted that Hines' open-ended core European fund – which invests in offices and high street retail - has grown 50% in the last 12 months to €700 mln.

Interestingly, high street retail has superceded shopping centres, Huber said. 'Previously, we focused on shopping centres. We're very active in acquiring high street retail for our core pan-European fund. We’re acquiring high street assets across 20 European countries, including the UK, Italy, Norway, Spain and Portugal.'

For Huber, European hotspots include Ireland, because 'we still expect to see a lot of economic growth, especially in the multifamily and retail sectors’. Italy is also interesting because of opportunities in the office and retail sectors, yet there is less competition than in some other markets.

'Pricing is the biggest challenge. In London, or Paris' CBD or in Germany, you have to be disciplined about investing there or not. You need to take a long-term view because there is the risk of a price correction in those markets,' Huber warned.