(LONDON) – Hines Pan-European Core Fund, one of Hines’ flagship funds, has completed the acquisition of 20 West Register Street (formerly the Mint Building), a prime 60,000-square-foot office scheme in the heart of Edinburgh.
Hines agreed upon the forward purchase of the building from Edinburgh-based property development and investment company, Chris Stewart Group, in June 2018 in an off-market transaction.
20 West Register Street, located on St. Andrew Square in the city’s vibrant and rapidly evolving East End district, is already pre-leased on a 15-year lease to investment management firm, Baillie Gifford.
The Hoskins Architects-designed building provides Grade A office space across seven levels, with the upper floors offering panoramic views of the city. The ground floor includes three retail units, which are leased to modern Chinese cuisine Tattu, the expanding pizzeria concept, Franco Manca and building society, Nationwide.
Peter Epping, senior managing director and fund manager of HECF said, “As one of the top UK regional cities, Edinburgh offers strong relative value in the European context. With the building’s prime location, high-quality design and strong income profile, it is a strong addition to our fund’s prime portfolio. Securing this asset in an off-market transaction demonstrates our ability to generate strong pipeline while markets are very competitive.”
Jake Walsh, director, Hines UK, said, “Edinburgh is one of the fastest growing cities in the UK with a proud reputation of high-quality, well-designed office stock. We’re pleased to have built on this tradition with the completion of the scheme, which is an exceptional, best-in-class building befitting its vibrant, dynamic location.”
Hines is currently active in the office, retail, student housing and logistics sectors, managing a combined UK property portfolio worth more than £2bn and located in London and key regional cities.
The Hines Pan-European Core Fund was set up in 2006 with the aim of providing investors with a resilient income profile derived from a diversified portfolio of high-quality assets located in inner-city locations across major European cities.
The Fund combines disciplined sustainable management policies with a risk-adjusted return profile and has been awarded the European leadership in the GRESB ranking for three years while delivering an average net total return of 8.2% over the last five years, with an income return of 3.5%,
The Fund has continually improved asset level performance of buildings by working in close collaboration with the local Hines teams and property managers and engaging tenants in a variety of ways. An example of this has been the drive to optimize the energy consumption of the buildings, resulting in a 12% reduction in like-for-like consumption since 2016. The total return of 8.4% achieved in 2018 illustrates that sustainability improvements could also be combined with strong performance for Fund’s investors.
Increasingly, the expectation from investors, tenants and other stakeholders from real estate owners to address the environmental impact of buildings is growing. Furthermore, the recognition of sustainability as a long-term driver of performance is being realized, with many investors looking to future-proof their returns through sustainability.
As of Q2 2019 the HECF portfolio was 97.1% occupied with an aggregate value in excess of €1.3bn. The portfolio of the Fund is currently composed of 21 assets invested in 15 city markets across 8 different European countries. The Fund has achieved an average return of 8.7% per annum over the past five years.
Hines is a privately owned global real estate investment firm founded in 1957 with a presence in 219 cities in 23 countries. Hines has approximately $124.3 billion of assets under management, including $63.8 billion for which Hines provides fiduciary investment management services, and $60.5 billion for which Hines provides third-party property-level services. The firm has 148 developments currently underway around the world. Historically, Hines has developed, redeveloped or acquired 1,362 properties, totaling over 449 million square feet. The firm’s current property and asset management portfolio includes 514 properties, representing over 222 million square feet. With extensive experience in investments across the risk spectrum and all property types, and a pioneering commitment to sustainability, Hines is one of the largest and most-respected real estate organizations in the world. Visit www.hines.com for more information. Visit www.hines.com for more information about the firm and www.hinessustainability.com to learn more about the sustainability program and objectives at Hines.
Since entering Europe in 1991, Hines has grown its European platform to include offices in 16 cities as well as a presence in 47 cities in 12 countries, with €18.2 billion of assets under management in Denmark, Finland, France, Germany, Greece, Ireland, Italy, Netherlands, Poland, Spain and the United Kingdom.