The institutional asset manager benefits from its main shareholders’ European, US and Australian networks, and is preparing to launch a central Europe fund next year
Set up two years ago, GLL Real Estate Partners is an asset management company specialising in devising property investment products for institutional investors. The Munich-based company is a joint venture of Lend Lease Real Estate Investments and Assicurazioni Generali of Italy, each of which hold 40% of the share capital, with the other 20% owned by the management.
GLL’s management team is led by joint managing directors Gerd Kremer, Rainer Göbel and Dietmar Georg, all formerly with HypoVereinsbank. Their strategy is to capitalise on the trend for transferring property holdings from direct to indirect ownership, and on the increasing demand for property asset management services.
“In the past, institutions were advised to invest in their home markets, so portfolios are heavily biased towards domestic markets,” says Georg. “But with the advent of the euro, investment markets have broadened and institutional investors are seeking to diversify their portfolios.”
GLL made headlines earlier this year when, together with WestWindCapital, it arranged the acquisition of the MesseTurm in Frankfurt – Europe’s tallest office tower – by a consortium of investors from Italy, Spain, Austria and Germany. Details of the sale are confidential but market observers put the value of the deal at €450m. GLL does not rule out further deals on this scale, but its focus is to create property investment funds for institutions. So far it has received around €1bn in commitments of capital.
GLL can draw on its shareholders’ extensive networks. With €50.8bn of assets under management, the Lend Lease group has a strong presence, particularly in the US and Australia, while insurance group Generali is an important player in western and central Europe. Generali is organised on a decentralised basis and 700 staff manage a property portfolio worth around €12bn.
“Our property funds tend to be core funds in terms of risk,” says Göbel. “We are mainly looking for investments in mature markets with high liquidity. We only assume limited letting risk and don’t invest in development.” Kremer adds: “We always work with local partners, recruited from our shareholders’ networks. This gives us good access to the market and is vital for developing and managing assets.”
GLL’s first fund has a total investment value of €600m. It invests equally in cities in the US and Europe, excluding Germany and the UK. “As long-term investors we did not feel comfortable with the currency risk attached to the pound,” says G”bel. “Germany was excluded from investment because the fund’s investors are already heavily exposed to this market.”
GLL plans to launch a central Europe fund in the next few months. “This new fund will be offered to a wider group of international investors,” says Göbel. “We intend to invest in two phases. In the first, we will focus on more established markets such as Poland, Hungary and the Czech Republic. In the second phase we will consider new markets such as Slovenia or Romania. It may sound adventurous to talk about these markets now, but they may provide investment opportunities in years to come.”
The fund, which will have an estimated investment value of between €300m and €500m, will start investing in the second or third quarter of 2003.
GLL is also involved in separate account investing for third parties. Last October it arranged the acquisition of a 65% interest in an office building for Hannover Re, a German insurance company. CarrAmerica Reality Corporation retained a 35% interest and is also managing the property.
GLL Real Estate Partners
Lindwurmstrasse 76
80337 Munich
Germany
Tel 49 89 72610 3651
Fax 49 89 72610 3609
