Fidelity property arm to spend double in Europe

The property investment arm of one of the world’s largest fund managers is to double its European cash spend this year.   Pembroke Real Estate, which buys global properties on behalf of privately owned Fidelity Investments, said it was stepping up its already aggressive European expansion plans now that values had fallen.   The group is not required to disclose its finances. However, it is known that Fidelity, which has more than £140bn of assets under management, made a £2.2bn profit last year and is believed to invest around 15%-20% of its earnings in real estate.   Pembroke managing director for Europe, Johannes Haug, said that the UK was of particular interest.   He said that Pembroke had already been approached by several UK banks seeking discreet cash buyers for parts of real estate portfolios owned by borrowers that were having trouble servicing their loans.   Pembroke is the owner of 49 Park Lane, W1, and Fidelity’s UK headquarters on Cannon Street, EC4. It manages more than 3m sq ft of property around the world.   Haug said that the group this year would be focusing on value-added developments in Europe rather than income-driven acquisitions.   Pembroke, whose last UK acquisition was of 3 and 10 Finsbury Square, EC2, in 2006, said it was particularly interested in redevelopment opportunities in the New Bond Street area of London’s West End.   It was also eyeing opportunities in the Nordic regions, especially in Stockholm where Haug said there was still “significant” upside to be had.   “This year, we will almost certainly spend at least twice the amount of cash that we spent on acquisitions last year,” said Haug.     “We plan to significantly increase our development risk.”     chris.bourke@rbi.co.uk