US investment bank Goldman Sachs has launched a massive new $2.5bn global property fund. Whitehall International 2001 will buy assets in Europe, the US, Japan and Korea, and will close next month. The new vehicle shows that Goldman Sachs’ hunger for real estate remains undiminished, having already bought aggressively in Europe over the last year via its private Whitehall real estate opportunity funds. It is estimated they have managed to raise a total of $9.4bn of equity.
Goldman Sachs’ last fund, Whitehall 7, closed in February last year with total commitments of around $1.86bn. The bank is co-investing in Whitehall International 2001, reportedly to the tune of around $400m. The Whitehall funds use debt: some is on a fixed rate, while others employ floating rates which are hedged. The funds also execute foreign currency forwards and options to hedge the cost bases that are adjusted quarterly.
A rival fund manager said he thought Whitehall had been buying so hard in Europe recently specifically to accelerate the launching of Whitehall International 2001, which has only been marketed for around six weeks. In February, Goldman Sachs was quick off the mark as the first foreign investor to buy a Swiss property company with the acquisition of Impris from Swiss bank UBS. The Impris portfolio comprised 13 office and retail properties totalling 100,000m2 located in Zurich and Geneva. The price was not disclosed but the portfolio formed part of a SFr1bn lot put on the market by UBS.
Just prior to that, Whitehall beat off rivals to win the bidding for Italian energy giant ENI’s property portfolio. It paid €620m (L1.2trn) for a 90.2% stake in Immobiliare Metanopoli, the quoted real estate arm of ENI, and a further €516m (L1trn) for other non-core property assets. The fund has also been one of the first foreign investors to jump into the resurging German market, buying real estate worth over €230m (DM450m) last month.
This included the €153m (DM300m) purchase of the 75,000m2 Top Tegel office project close to Berlin’s Tegel airport. In addition, late last year, Whitehall took the booming Paris office by storm in a €610m (FFr4bn) spree in two huge deals. In conjunction with local partner Shaftesbury, it bought the majority of phases one and two of the Landy Pleyel scheme. These comprised 120,000m2 of offices and Whitehall paid around €305m (FFr2bn). With GCI, the fund also picked up a four-property portfolio from Peugeot Citroën for between €274m (FFr1.8bn) and €290m (FFr1.9bn). The four buildings total 60,000m2.
