The merger-and-acquisition activity is all about synergies in the insurance and pension-fund industries in Europe. But Prudential also sits on one of the most attractive property portfolios of any UK fund. It is valued at about euro 13.2 billion. ($16.5 billion).
The 150-year old fund had restricted its property acquisitions to its UK domestic market. Four years ago it expanded that limit and decided to invest euro 1.2 -billion ($1.5 billion--roughly 10% of its UK real estate holdings) abroad. Half the overseas portfolio by value is in North America, 22% in continental Europe and 33% in Asia Pacific. The split is 75:25 direct to indirect property.
Prudential executives have also stated that if the government terms for the creation of REITs are right, it would look to put some of its portfolio in a new, as yet unnamed, vehicle.
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