NORTH AMERICA – The State of Wisconsin Investment Board (SWIB) has approved new real estate commitments totalling $755.3m (€555.5m).
One of these was for $187.5m into the Brookfield Core Plus US Office Partners commingled fund.
Brookfield Office Properties is still in the capital-raising stage for this investment entity.
The company is looking at a total equity raise of around $1bn.
The idea is to have around 50% of the capital from institutional investors and half of the capital from Brookfield.
The targeted leveraged IRRs are 11-14% on a gross basis and 9-12% on a net basis.
The leveraged component for the fund on a stabilised basis is around 60%.
The investment strategy is to acquire core-plus office buildings in eight targeted markets in the US.
These areas are the major gateway cities of Seattle, San Francisco, Los Angeles, Denver, Houston, New York, Boston and Washington, DC.
SWIB made a $200m commitment into the BREP Edens, run by Blackstone Real Estate Partners.
The pension fund said this investment would be placed in the core sector of its real estate portfolio, its first foray into the sector.
The manager is raising capital for this to cover a $968m investment made by Blackstone into Edens Investment Trust at the end of 2013.
This company is a major owner of shopping centres on the East Coast of the US.
Blackstone’s investment in Edens was to take out a $718m investment in the company previously held by the State of Michigan Retirement System and a new $250m investment in Edens.
SWIB also made a $120m commitment into the JP Morgan Strategic Property Fund, a core open-ended commingled fund that invests in the US.
According to industry sources, the fund now has an entry queue of $2.7bn.
The expectation is that a commitment the size of SWIB’s will take 15-18 months to be called by the manager.
The pension fund said it expected the capital to be fully called within three years.
The pension fund made one other investment in a core open-ended commingled fund – a $75m allocation to RREEF America REIT II – as well as a $52.3m commitment into the Lone Star Real estate Fund III.