TIAA-CREF to Grow Global Platform with Full Ownership of JV

Tom Garbutt

By Gail Kalinoski, Contributing Editor

Saying it accelerates the growth of its global real estate platform, TIAA-CREF has agreed to buy out the remaining 40 percent interest in TIAA Henderson Real Estate from its joint venture partner, Henderson Global Investors, for £80 million, or $122.7 million.

The deal is expected to close in the second quarter.

Known as TH Real Estate, the London-based joint venture launched a year ago and had about $26 billion in assets under management, including assets in Europe, Asia and North America. A global real estate investment management company, TH Real Estate focuses on core and value-add investments in all commercial real estate sectors. It will operate as a standalone subsidiary within TIAA-CREF’s Asset Management multi-boutique platform and have independent executive leadership and investment teams.

Tom Garbutt, head of TIAA-CREF global real estate & chairman of TH Real Estate, said acquisition of the ownership interest “underscores our long-term commitment to real estate, an asset class that has served our clients for many years.”

“We are well positioned to capitalize on the many attractive opportunities we see through our world-class investment platform,” Garbutt added in a news release.

TIAA-CREF started investing in real estate on behalf of individuals and institutional investors in 1934 and now has $82 billion in assets under management.

In the past year, TH Real Estate has made 67 acquisitions worth more than $3.7 billion. The JV also established itself as global real estate investment manager, raising more than $1.3 billion in new equity mandates and securing $3.6 billion in capital commitments from closed-end fund investors, according to a news release from New York-based financial services provider TIAA-CREF.

Robert Leary, executive vice president & president of asset management for TIAA-CREF, said having full ownership of TH Real Estate “is an exciting step in our long-term plan to expand our asset management business.”

Andrew Formica, chief executive of Henderson, said his firm would maintain a strong relationship with TH Real Estate, which will continue to be a sub-advisor on its successful Henderson UK Property OIEC.

“Our decision to sell our 40 percent holding in TH Real Estate to TIAA-CREF will give them the best possible opportunity to grow their business,” he added in the release.

James Darkins, chief executive of TH Real Estate, noted the JV had created a “truly global offering by entering new markets and geographies, launching new funds and investing alongside clients and partners.”

Last month, TH Real Estate said it had agreed to expand into Sweden with the purchase of the Nova Lund Shopping Centre in Lund for approximately $190 million on behalf of TIAA-CREF. The transaction is expected to close in the third quarter and represents TH Real Estate’s plans to invest in the Nordic region, a key market in its European strategy.