Azerbaijan’s £22bn state oil fund and the £31bn Canadian pension fund HOOPP are considering moves into London property development.
Speaking at the London Real Estate Forum this week, Azerbaijani fund chief investment officer Israfil Mammadov and HOOPP real estate vice president Michael Catford said they were both willing to go up the risk curve.
The Healthcare of Ontario Pension Plan has invested $7bn in real estate globally and Catford said any UK investment would be done with partners.
It has already partnered on one London project, taking a 50% stake in the Crown Estate’s £100m development, W1, in late 2010.
Catford said: “London is the largest, most liquid and most transparent property market in the world.
“Most of what we do in the UK and Europe has an opportunistic and development bent to it. We are not traders. We want to create long-term income. Most of what we are doing is development-oriented. Buying a standing investment in this market is horribly expensive.
“The reason we are here is to create value and enhance returns. We are oriented towards refurbishment, repositioning and development.”
Mammadov said London was top of his fund’s list of opportunities from a real estate perspective.
“We are in the process of building a diversified real estate strategy. We will start relatively safe – core – and as we get more comfortable we will start going up the risk curve. Even now we are looking at development, but not for the time being,” he said.
Mammadov added that his fund currently didn’t have an office in London, but planned to find a base in the capital at some point in the future.
damian.wild@estatesgazette.com
