TIAA-CREF, CNP Assurances Form $1.2B JV for German Retail Properties

Tom Garbutt

By Gail Kalinoski, Contributing Editor

TIAA-CREF and CNP Assurances have formed a joint venture to invest $1.2 billion in three retail properties in Germany.

The New York-based financial services organization acquired the assets and will manage them on behalf of the joint venture. TIAA-CREF developed one of the shopping centers: Erlangen Arcaden in Erlangen, Germany. The other two properties are PEP in Munich and Gropius Passagen in Berlin.

This is the first time TIAA-CREF has worked with CNP Assurances, a leading French insurance company, according to a TIAA-CREF spokesperson. AEW Europe advised CNP Assurances on the deal.

The partnership is also the first time TIAA-CREF will manage European-based properties for a joint venture. TIAA-CREF has been investing in Europe for almost 20 years and in German retail properties since 2007, when it developed Erlangen Arcaden. The three shopping centers in the JV are the organization’s only retail holdings at this time in Germany, the spokesperson said.

“Germany’s improving economy and limited supply of retail space continue to make these properties attractive assets in TIAA-CREF’s global real estate portfolio,” Tom Garbutt, head of global real estate for TIAA-CREF, said in a news release. “This joint venture, with a partner like CNP Assurances who shares our long-term vision, will allow us to further diversify our portfolio and take advantage of investment opportunities that we believe will add value over time.”

The organization, which is also a leading provider of retirement services, said the new joint venture “advances its strategy to manage assets in partnership with sophisticated investors around the world.” TIAA-CREF had $542 billion in assets under management as of Sept. 30. It manages real estate investments on behalf of sovereign wealth funds and other institutions in the United States. TIAA-CREF directly owns more than $28.5 billion in gross assets in the office, retail, industrial and multi-family sectors across the U.S. and Western Europe.

Earlier this year, it made another big transaction for its global business. In June, TIAA-CREF and Henderson Global Investors, London, announced they were creating TIAA Henderson Global Real Estate. The investment management company will consist of TIAA-CREF’s European real estate business, Henderson’s European and Asia-Pacific real estate businesses and a new global distribution and client service organization.

Germany has been seeing investments in commercial real estate grow. Last week, Hines acquired a 952,539-square-foot logistics facility in Erfurt from a fund managed by CBRE Global Investors, giving it 4.9 million square feet of industrial holdings in the country.

A Jones Lang LaSalle Inc. research report, “Shopping Centre Investment Market HI 2013,” noted that, “the continuing economic weakness in the eurozone has not damaged Germany’s attractiveness as a destination for property investments.” The report said asset/fund managers comprised the largest group, 37 percent, of shopping center buyers in Germany in the first half of 2013. The JLL report predicted a busy second half of the year for retail center investments in the country.