The co-owner of the Brindleyplace office complex is preparing to spend £1 billion on buildings in the UK, doubling its assets in an effort to diversify away from riskier acquisitions.
Hines UK, the British division of the American firm Hines, one of the world’s largest real-estate groups in terms of assets, has £1 billion worth of property here.
In July 2010, Hines bought the Brindleyplace offices in Birmingham in a joint venture with property investor Moorfield.
Tenants include commercial property consultant Drivers Jonas Deloitte, Royal Bank of Scotland and investment consultant Mercer.
“There is a desire to invest money into more traditional markets such as London to complement Hines’s investments in Russia and Eastern Europe, as well as the US,” says Ross Blair, the company’s new managing director for the Houston-based company’s UK operations.
“We can put together £200 million to £300 million equity in the UK in the next two to three years, which, combined with debt financing and third-party investors, would give us a firepower of over £1 billion.
“We have seen opportunities in Birmingham, Manchester, Glasgow and Edinburgh, with the same quality of tenants as in London, but the property prices are lower.”
Over the past 50 years, privately owned Hines has assembled a $23.7 billion real-estate portfolio, consisting of more than 1,100 properties.
It has developed some of the buildings, bought some, and manages others for third parties.
In the UK, the company now aims to move away from developing to focus on investment and asset management instead.
While the company has ample sources of financing, with $15 billion of its own equity in 28 investment funds, it is looking for third-party capital sources to increase its purchasing power and split the risk.