NEW YORK, Feb. 14, 2018 – PGIM Real Estate completed more than $14 billion in transactions worldwide in 2017 on behalf of institutional investors, including investments in real estate equity and debt and property dispositions. PGIM Real Estate is the real estate investment business of PGIM, the $1 trillion global investment management businesses of Prudential Financial, Inc. (NYSE: PRU).
“PGIM Real Estate’s 2017 transactions reflect our ability to look beyond the cycle to assess value in a long-term context. We successfully identified attractive income streams and areas of market dislocation to deliver target returns for our clients via growth-driven, value-driven and cyclical opportunities around the world,” said Eric Adler, Chief Executive Officer of PGIM Real Estate.
The more than $14 billion total was across 212 transactions, spanning the Americas, Europe and Asia Pacific regions. Highlights include:
- More than $8 billion through 115 U.S. transactions
- More than $3 billion through 61 Europe transactions
- More than $2 billion through 17 transactions across Asia Pacific, primarily in Japan, Singapore and Australia
- More than $700 million through 19 Latin America transactions, primarily in Mexico
- More than $500 million invested through debt strategies, primarily across the U.K. and the U.S.
“While the investment environment remains favorable, real estate performance continues to vary considerably across sectors, regions and markets,” Adler said. “As investors move cautiously up the risk curve in search of more compelling risk-adjusted returns, we will employ our disciplined investment approach to capitalize on the resulting global opportunities. These include supply-constrained markets and non-traditional real estate sectors with structural growth potential, as well as debt investments that can offer some protection behind a first loss position. We will also continue to selectively sell stabilized, non-strategic properties.”
Regional highlights and trends
In the United States, PGIM Real Estate continued to focus primarily on high-barrier markets, as well as higher-yielding secondary assets and markets, to reach nearly $4 billion of acquisitions. About two-thirds of its acquisitions activity targeted the multifamily sector, consistent with the company’s expectations that job growth and demographic trends will continue to fuel growth in apartment rentals. PGIM Real Estate was a net seller of office assets, with more than $2 billion in dispositions.
In addition, PGIM Real Estate provided more than $100 million in financing, including preferred equity, core plus and mezzanine debt.
In Latin America, transactions were mostly industrial acquisitions in the central area of Mexico, the Bajío region, Monterrey and the northern state of Chihuahua.
In Europe, the U.K. and Germany accounted for the majority of transactions activity, which was 15 percent higher than in 2016. Most of the 61 European acquisitions targeted the office and hospitality sectors, as PGIM Real Estate continued to focus on value-add opportunities in major markets, along with capitalizing on major structural trends in alternative sectors.
In addition, PGIM Real Estate provided approximately $360 million in financing across 11 transactions, primarily in the U.K. Transactions included whole and junior loans, and mezzanine and preferred equity positions in development and existing assets. Sectors included traditional residential, student housing, office, retail, industrial, mixed-use schemes and hotels.
In Asia Pacific, transactions doubled compared with 2016, with a clear focus on major cities in Japan, followed by Singapore and Australia. The office, retail and industrial sectors accounted for the majority of transactions as PGIM Real Estate focused on enhanced-return opportunities in smaller markets and sought to capitalize on limited supply in previously underperforming markets.
Representative activity around the world
- A portfolio of 28 workforce housing properties across Florida, North Carolina, Tennessee and Texas
- LaCenterra at Cinco Ranch, a 412,900-square-foot outdoor mixed-use retail lifestyle center, in the Houston metro
- Regions Plaza, a 502,846-square-foot, LEED Gold- and Energy Star-certified office tower in Midtown Atlanta, Georgia
- A portfolio of 17 Class A industrial properties in the northern region of Mexico, with a gross leasable area of 2.7 million square feet, by Terrafina, the Mexican industrial real estate investment trust (FIBRA) externally advised by PGIM Real Estate
- 42-44 rue de Paradis, a 6,000-square-meter office building in Paris
- The Delta Hotel portfolio, comprising 17 assets operating under the Q-Hotels brand, situated throughout the U.K.
- Austria Campus, a three-property office and hotel development portfolio located in Vienna
- 1 Buroh Lane, a 60,000-square-meter multi-temperature controlled food storage and distribution center in Jurong, Singapore
- The Toyobo Building, a 36,000-square meter office building in Osaka
- A five-year development loan, converting to an investment facility upon completion, to finance the development of a 140,000-square-foot hotel in Stratford, east London.
About PGIM Real Estate
PGIM Real Estate is the real estate investment business of PGIM, the global investment management businesses of Prudential Financial, Inc. (NYSE: PRU). Redefining the real estate investing landscape since 1970, PGIM Real Estate has professionals in 18 cities in the Americas, Europe and Asia Pacific with deep local knowledge and expertise, and gross assets under management of $69.0 billion ($50.5 billion net) as of Sept. 30, 2017. PGIM Real Estate’s tenured team offers to its global client base a broad range of real estate equity, debt and securities investment strategies that span the risk/return spectrum. For more information, visit pgimrealestate.com.
With 15 consecutive years of positive third-party institutional net flows, PGIM, the global asset management businesses of Prudential Financial, Inc. (NYSE: PRU), ranks among the top 10 largest asset managers in the world with more than $1 trillion in assets under management as of Dec. 31, 2017. PGIM’s businesses offer a range of investment solutions for retail and institutional investors around the world across a broad range of asset classes, including fundamental equity, quantitative equity, public fixed income, private fixed income, real estate and commercial mortgages. Its businesses have offices in 16 countries across five continents.
Prudential’s additional businesses offer a variety of products and services, including life insurance, annuities and retirement-related services. For more information about PGIM, please visit pgim.com. For more information about Prudential, please visit news.prudential.com.
© 2018 PGIM is the primary asset management business of Prudential Financial, Inc. (PFI). PGIM Real Estate is PGIM’s real estate investment advisory business and operates through PGIM, Inc., a registered investment advisor. Prudential, PGIM, their respective logos as well as the Rock symbol are service marks of PFI and its related entities, registered in many jurisdictions worldwide. PFI of the United States is not affiliated with Prudential plc, a company headquartered in the United Kingdom. Ref: 17BDUFF-AVPR7V