CBRE Global Investors has won a £120m mandate from a Hewlett-Packard subsidiary which is making its real estate debut.
Technology giant HP’s services division, EDS Trustee, has selected the firm to oversee its UK pension scheme’s entry into property. The move was prompted by the strong returns generated by real estate relative to bonds.
CBRE GI will be following a “conservative” investment strategy for EDS Trustee, buying assets in all sectors of the UK market, which EDS Trustee views as “a better proposition for real estate investment than Europe”.
The fund will target a real return of 4% pa.
CBRE GI has already completed its first deal for EDS Trustee, which HP acquired for almost $14bn (£9bn) in 2008. It has bought an £18m retail portfolio in an off-market transaction from rival fund manager Threadneedle Investments.
The purchase includes an out-of-town retail warehouse in Worthing, Surrey, let to Argos and Pets at Home, and three high street shops, all of which were part of the £32m Orchid Portfolio.
The shops are located in Truro in Cornwall, Leeds and Worcester and are let to Boots, Lush and Barclays Bank respectively.
The mandate will be managed by CBRE GI senior director Tim Munn, who said: “CBRE Global Investors is pursuing an income-focused, risk-averse investment strategy on behalf of EDS Trustee.”
It is CBRE GI’s second win in recent months after it picked up a £500m mandate from RBS subsidiary Direct Line Insurance, as revealed by Estates Gazette (23 June, p45).
Also this week, proposals were expected for a £350m UK property mandate from Tyne and Wear Pension Fund.
In April, the council published an invitation to tender for management of its segregated direct UK property portfolio. The mandate will be carried out on an advisory basis. The current manager is Aberdeen Property Investors, which has managed the portfolio for more than 20 years and is expected to apply for the position.
sophia.furber@estatesgazette.com
