TIAA, Henderson Form $20B CRE Venture

LONDON-TIAA-CREF and Henderson Global Investors, based here, said Monday they would partner on a new global real estate investment management company, TIAA Henderson Global Real Estate. The new company, to be headquartered in London, will have about US$20 billion of assets under management. In a related transaction, TIAA-CREF is acquiring 100% of Henderson's US property business, although the new venture will focus on European and Asia Pacific assets.

“We believe there are compelling growth opportunities in global real estate,” Tom Garbutt, head of TIAA-CREF global real estate and chairman of the new company, says in a release. “This new venture will leverage TIAA-CREF's financial strength and longstanding real estate investment capabilities together with Henderson's expertise and wide array of real estate investments in Europe and Asia Pacific.”

James Darkins, managing director, property at Henderson, will become CEO of TIAA Henderson Global Real Estate when the deal closes. In the release, Darkins says the combination of TIAA-CREF's and Henderson's European and Asian real estate interests creates “a new powerhouse in global real estate. Between us, we have the scale and capital resources to serve the real estate investing needs of our existing clients, as well as create exciting new opportunities to co-invest alongside them around the globe.”

TIAA will own 60% of the new company, with Henderson owning the remainder. Bloomberg reported that as part of the agreement, Henderson will receive 114.2 million pounds in cash, excluding deal costs. The deal is expected to close in the first quarter of 2014.

With about $44 billion in real estate assets under management as of March 31, New York City-based TIAA will continue to manage its own North American CRE business, while providing investment management services for the new venture. Additionally, TIAA and Henderson have agreed to explore “other strategic opportunities beyond the real estate sector,” the release states.