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Pension funds

NPS, Tishman form $1.5 bn JV to invest in US housing

The platform focuses on affordable housing, as well as property technology firms and life science real estate

By Nov 10, 2021 (Gmt+09:00)

2 Min read

NPS Chief Executive Kim Yong-jin delivers a keynote speech at ASK 2021 in October
NPS Chief Executive Kim Yong-jin delivers a keynote speech at ASK 2021 in October

The National Pension Service (NPS) of South Korea, the world’s third-largest pension fund, and New York-based global real estate investment manager Tishman Speyer Properties LP have created NPS-Tishman Speyer Thematic Platform, a $1.5 billion separately managed fund focusing on real estate assets in the US.

While NPS will become the anchor investor in the new platform, the partnership focuses on affordable housing in supply-constrained neighborhoods, especially in lagging or suburban areas in the US.

The fund will also make investments in promising property technology companies, especially at the beginning stages of their growth cycles. Additionally, it will form a new mezzanine lending arm within Tishman Speyer that will originate and acquire high-yield loans tied to real estate assets in gateway cities in the US.

Furthermore, the fund will invest in life science real estate assets of Breakthrough Properties, a JV between Tishman Speyer and life sciences investment firm Bellco Capital. Founded in 2019, Breakthrough Properties has invested in some major life sciences clusters in Boston and San Diego. In November 2020, the venture said it has completed the initial closing of Breakthrough Life Science Property Fund, with an aggregate $1 billion in capital raised, to invest in lab facilities across the global biotechnology markets.

Established in 1978, Tishman Speyer has acquired and operated 484 properties with a combined value of over $121 billion. Its portfolio includes Rockefeller Center in New York City, Mission Rock in San Francisco, Sony Center in Berlin and The Springs in Shanghai. In September of this year, the asset manager has signed a strategic business agreement with Korea’s Hana Financial Group to invest up to $500 million over the next two years in real estate assets in the US, Europe and Asia, as well as to take environmental, social and governance (ESG) factors into account in investments.

NPS is expanding its real estate investment in the US. The pension fund and global leading real estate investor Hines jointly set up a $1.5 billion JV for a build-to-core portfolio in December 2020 and acquired the headquarters complex of Pacific Gas & Electric Company (PG&E) in San Francisco for $800 million, as part of the portfolio in September of this year. At the time of the PG&E acquisition, NPS said the pension fund and Hines will spend an additional $1.7 billion to redevelop the property into two office buildings and a multifamily apartment complex of over 600 units.

With 930 trillion won ($788.5 billion) of total assets under management, NPS plans to increase its alternative investment proportion from 10.5% to 15% by 2025 to generate stable returns and reduce risk.

Write to Jong-woo Kim and Jung-hwan Hwang at jongwoo@hankyung.com
Jihyun Kim edited this article.
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