Hines, a privately-owned global real estate investment firm, and the National Pension Service of Korea (NPS) have announced the formation of a new $1.5bn build-to-core joint venture. The new venture will pursue urban infill developments across a broad span of sectors including mixed-use, residential, office and logistics in high-barrier-to-entry markets. Twenty per cent of the venture is currently committed to projects in North America and Asia-Pacific.
Hines said that the venture would target a build-to-core strategy to create a portfolio of prime assets resilient to market uncertainties. NPS and Hines believe that long-term investments in proven locations, supported by innovation and new technology, will capture sustained demand and create outsized value.
As well as being a co-investor, Hines will be responsible for sourcing, designing, and executing development opportunities globally. The firm already has a presence in 225 cities worldwide and will leverage its existing networks to source deals.
Hines was founded in 1957 and has approximately $144.1bn of assets under management. National Pension Service of Korea (NPS) is one of the largest pension funds in the world with approximately $672 billion USD in assets as of September 30, 2020.
In an announcement, both sides stressed their long-term thinking around the new venture and its build-to-core strategy.
“We believe there are significant opportunities to invest in the highest-quality, bulletproof assets that will provide long-term value to NPS stakeholders,” commented Mr. Hyo-Joon Ahn, Chief Investment Officer of the National Pension Service of Korea. “The current economic climate, shaped by global responses to the pandemic, has impacted all sectors of commercial real estate. This venture has committed to a long-term strategy capitalizing on the transformation of living environments, consumer behaviour and space-use patterns combined with latest technology in real estate development.”
Hines Chairman and CEO Jeffrey C. Hines said, “Like us, NPS values permanence, quality and innovation in core real estate. We see this new mandate as a natural extension of our longstanding relationship and a further opportunity to apply our real estate investments and execution skillsets to create differentiated multi-sector projects that enhance communities.”
NPS and Hines have previously collaborated on investments in Europe and North America, with landmark projects that include the Sony Center in Berlin, One Vanderbilt and One Madison in New York.
“We are pleased with the elevated level of trust extended to us by our valued partners like NPS over the past few years as we’ve leaned toward executing a stronger investment strategy even more focused on our investors’ needs,” added Hines Global Chief Investment Officer David Steinbach. “Discretionary capital programs allow us to seize on the best opportunities, apply our skillsets, and focus on being the real estate partner of choice globally.”