Border to Coast commits €80m to Hines European value add fund

Border to Coast is the second LGPS investor to partner with Hines in recent years

Border to Coast commits £80m to Hines' European value add fund

Border to Coast Pensions Partnership, the largest Local Government Pension Scheme (LGPS) in the UK, has committed €80 million to Hines’ latest closed-ended European value-add fund, Hines European Real Estate Partners III (HEREP III).

Since the fund’s launch in mid-2022, HEREP III raised over €1.6 billion of equity commitments, exceeding its target of €1.5 billion.

The total number of investors in the fund is now 35, with a well-balanced mix of existing and new investors, such as Border to Coast Pensions Partnership, in addition to Hines’ co-investment. Border to Coast is the second LGPS investor to partner with Hines in recent years following Greater Manchester Pension Fund who committed to the Hines US Property Partners in 2022.  

Alistair Smith, Head of Real Estate at Border to Coast, said: “After carrying out extensive due diligence, we believe that Hines and the HEREP III team have the capability to help us deliver the objectives of our Global Value-add fund, providing investment capital appreciation and diversification for our Partner Funds.”  

Since its inception HEREP III has allocated over €300 million of equity to assemble an initial portfolio of four assets in three markets. The investment period for the fund is expected to continue until mid-2026 and will prioritize three key sectors: purpose-built student accommodation (PBSA), distribution logistics and highly sustainable office spaces in prime locations. Hines believes these sectors have significant unmet demand and present opportunities for ongoing rental growth.  Earlier this year the predecessor fund to HEREP III, Hines European Value Fund 2 (HEVF 2), was awarded five stars from GRESB, an independent ESG-focused organization who provide peer benchmarks for investors and managers.  HEVF 2 increased its score from 94 to 100/100, placing the fund once again in its peer group of 65 for European, non-listed, value-add, closed-ended vehicles. 

Paul Campbell, Real Estate Portfolio Manager at Border to Coast, said: “Border to Coast has strong focus on environmental, social and governance factors (ESG) and the impact this will have on asset values in the longer term. Partnering with Hines, a real estate specialist investment manager with strong ESG credentials, will enable us to deliver for our Partner Funds.” 

Click here to receive CRE Herald’s weekly newsletter, news alerts and insights!