TIAA-CREF’s takeover of TH Real Estate could lead to more firepower and better control of its lending business, says the firm’s head of real estate debt Christian Janssen.
TIAA-CREF increased its stake in the firm from 60% to 100% yesterday after paying £80m for Henderson Global Investors’ 40% interest in the business. TIAA-CREF and Henderson started the joint venture last year.
TH Real Estate would now operate as a subsidiary within TIAA-CREF’s Asset Management platform with its own executive and investment teams.
Its independence would be preserved and nothing would change in the day-to-day operation of the business and there would be no commercial tie-in with TIAA-CREF’s US lending operation, said Janssen.
“There are great advantages to being owned by one parent with almost a trillion dollars under management and it’s simpler to execute under only one parent as opposed to two,” he said. “Overall, it’s a very powerful alignment.”
TH Real Estate’s plans for growth were also a better fit with TIAA-CREF’s long-term strategic planning, said Janssen.
Since launching last April, the firm has made 67 acquisitions in Europe, Asia and Australia valued at more than $3.7bn.
Its UK lending business has completed three loans this year totalling £200m. Its UK Enhanced Debt Fund is targeting £500m of equity and has completed its first close with £138m. It targets a 6-7% return investing in whole loans and selective mezzanine up to 75% LTV.
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