Korean pension fund and Hines form US$1.5 billion real estate JV
Partners to invest in urban infill developments in markets with high entry barriers globally
30 Dec 2020 | Michael Marray

The National Pension Service of Korea (NPS) and real estate investment group Hines have formed a US$1.5 billion equity joint venture in real estate. The 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 globally.

Around 20% of the venture is currently committed to projects in North America and Asia-Pacific. The venture targets a build-to-core strategy to create a portfolio of prime assets resilient to market uncertainties. NPS and Houston, Texas-based Hines believe that long-term investments in proven locations, supported by innovation and new technology, will capture sustained demand and create outsized value.

In addition to being a co-investor in the partnership with NPS, privately owned Hines will be responsible for sourcing, designing and executing development opportunities globally, which will make use of Hines’ relationship networks formed across the firm’s presence in 225 cities worldwide.

NPS and Hines have previously partnered on investments in Europe and North America, with landmark collaborations including the Sony Center in Berlin, and One Vanderbilt and One Madison in New York.

“We believe there are significant opportunities to invest in the highest-quality, bulletproof assets that will provide long-term value to NPS stakeholders,” NPS chief investment officer Hyo-Joon Ahn comments.

“The current economic climate, shaped by global responses to the pandemic, has impacted all sectors of commercial real estate,” he notes. “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.”

The NPS is one of the world’s largest pension funds, with around US$672 billion in assets as of September 30 2020. It manages funds investing in financial investment assets both domestic and global, while diversifying the investment portfolio into equities, fixed income and alternative asset classes including real estate, private equity and infrastructure.

Hines, founded in 1957, has presence in 225 cities in 25 countries. It has around US$144 billion of assets under management, including US$75.5 billion for which Hines serves as investment manager, including non-real estate assets, and US$68.6 billion for which Hines provides third-party property services. The firm has 165 developments currently underway around the world.