PRESS RELEASES

Hines' European Value Added Fund Acquires Second Property in London

6/11/2007

(LONDON, UK) – The London office of Hines, the international real estate firm, announced today that it has acquired 1-11 Hay Hill in London from The Carlyle Skelton Development Group, a commercial property investment and development company. The seven-story, 45,000-square-foot (4,180-square-meter) building is located on the corner of Grafton Street and Hay Hill, in the heart of London’s exclusive Mayfair district, and it is in close proximity to restaurants, hotels, retail outlets and city parks.

The property was purchased by Hines European Value Added Fund (HEVAF). This represents the seventh acquisition by HEVAF, and the second in London after the acquisition of Gartmore House, a five-story office building situated directly above London’s Fenchurch Street mainline rail station, which was acquired late last year. 

Hines has hired architects Hamilton Associates to renovate this 1899 structure into a first-class office building while retaining and restoring its original façade. Renovation plans include moving the main entrance on Hay Hill Street to the other side of the building on Grafton Street and rebranding the project as No. 1 Grafton Street. A planning application has been submitted to Westminster City Council for 49,000 square feet (4,333 square meters) of office, retail and residential space. Construction on the project is scheduled to begin in January 2008 with a completion date slated for late 2010. The building is currently partially occupied for the short term by a combination of office and retail tenants.

 Hines UK Development Director Andrew Reynolds said, “This represents a rare opportunity to create a prime West End office development providing outstanding accommodation, and we look forward to fulfilling the demand for high-end office space in the Mayfair market.”  

“We are very pleased to further diversify our investments, following our acquisition of Gartmore House in London last year. We believe this acquisition secures our commitment to acquire high potential investments in a strongly competitive London marketplace,” said Bahram Motamedian, fund manager for HEVAF.  

HEVAF is capitalized with $370 million (€287 million) of equity commitments provided by German and Swiss institutions. HEVAF invests primarily in office projects, but there is an allocation for other product types. Hines will focus on acquiring buildings in Western European countries, targeting France, Germany, Italy, Spain and the UK, and will seek to add value to acquisitions through tactics such as renovation, strategic leasing or re-leasing, improving operational efficiencies and refinancing.

After more than three successful decades in the United States, Hines entered the European market in Berlin in 1991. Since then, the firm has developed projects in: Barcelona, Berlin, Düsseldorf, Frankfurt, London, Madrid, Marbella, Moscow, Munich, Milan, Paris, Prague, and Warsaw. The firm’s European portfolio consists of 40 projects totaling more than 12.1 million square feet (1.1 million square meters).

Hines opened its office in the United Kingdom in 2000. To date, Hines UK has developed more than 283,200 square feet (26,310 square meters) of office space and has approximately 1.6 million square feet (150,960 square meters) of space currently under development.

Hines is a privately owned real estate firm involved in real estate investment, development and property management worldwide. The Hines portfolio of projects underway, completed, acquired and managed for third parties includes more than 950 properties representing approximately 380 million square feet of office, residential, mixed-use, industrial, hotel, medical, retail and sports facilities, as well as large, master-planned communities and land developments.  With offices in 67 U.S. cities and 15 foreign countries, and controlled assets valued at approximately $16 billion, Hines is one of the largest real estate organizations in the world. Visit www.hines.com for more information.