NEW YORK--(BUSINESS WIRE)--PGIM Real Estate completed approximately $12 billion in transactions worldwide in 2018 on behalf of institutional and high net worth 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 2018 transactions reflect our ability to successfully identify assets that offer attractive income streams and sources of growth to deliver target returns for our clients over the long term, as well as assets that offer capital protection and are in locations that will fare well through a downturn,” said Eric Adler, chairman of PGIM’s real estate businesses and chief executive officer of PGIM Real Estate. “We capitalized on sources of growth through market-level growth opportunities, active asset management strategies, favorable structure trends, and value sectors and locations around the world, while continuing to selectively sell stabilized, non-strategic properties.”
The $12 billion total was across 216 transactions, spanning the Americas, Europe and Asia Pacific regions. Highlights include approximately:
- $8.0 billion through 135 U.S. transactions
- $2.4 billion through 56 European transactions
- $1.4 billion through 10 transactions across Asia Pacific
- $200 million through 15 Latin American transactions
“While there is a sense of caution among global real estate market participants – reflecting concerns about elevated real estate pricing, a perceived lack of available stock and heightened political uncertainty – capital is still targeting the sector and transactions activity remains stable,” Adler said. “As investors seek to achieve an optimal mix of offense and defense in their portfolios, we are well-positioned to employ our disciplined and globally integrated investment approach to capitalize on the resulting opportunities around the world. These include supply-constrained markets and non-traditional real estate sectors with structural growth potential, as well as debt investments that can offer reduce risk exposure.”
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 $5 billion of acquisitions. More than half of its acquisitions activity targeted the multifamily sector – including more than $1 billion – in workforce housing properties, 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 $1 billion in dispositions.
In addition, PGIM Real Estate provided more than $500 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 and the northern state of Chihuahua.
In Europe, the U.K., France and Germany accounted for the majority of transactions activity. Of the 38 European acquisitions, the office sector was a major focus as PGIM Real Estate continued to focus on value-add opportunities in major markets.
In addition, PGIM Real Estate provided more than $400 million in financing across 12 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 focused on major cities in Australia, Japan and Singapore. The office and retail sectors accounted for the majority of transactions as PGIM Real Estate continued to focus on enhanced-return opportunities in select key markets and sought to capitalize on limited supply in previously underperforming markets.
Representative activity around the world
- 470 Park Avenue South, a 301,178-square-foot, Class A office and retail building in New York City, in partnership with SJP properties
- Four multifamily workforce housing portfolios in Raleigh-Durham, Ponte Vedra Beach, Charleston and South Florida, in partnership with Carroll Organization
- A 50 percent interest in a portfolio of five Class A multifamily properties valued at $500 million, in the San Francisco Bay Area, in partnership with a CityView managed client
- A portfolio of mixed-use and lifestyle retail developments totaling 57,990 square meters for approximately $100 million in Merida, Cancun and Mexico City, in partnership with Central de Arquitectura
- The Square, an iconic 7,000-square-meter office building situated in the Paris central business district
- M Campus, a 45,000-square-meter office campus in Meudon, on the outskirts of Paris in partnership with Varma
- 78 Shenton Way, a 362,051-square-foot property in Singapore’s central business district comprising two office buildings
- A 75 percent interest in the prime retail and commercial component of York & George, a mixed-use project in George Street, Sydney*
About PGIM Real Estate
PGIM Real Estate, the real estate investment business of PGIM, has been redefining the real estate investing landscape since 1970. Combining insights into macroeconomic trends and global real estate markets with excellence of execution and risk management, 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 $72.7 billion ($50.8 billion net) as of December 31, 2018. 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.
About PGIM and Prudential Financial, Inc.
With 16 consecutive years of positive third-party institutional net flows, PGIM, the global asset management business 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, 2018. 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 15 countries across four continents. For more information about PGIM, visit pgim.com.
Prudential’s additional businesses offer a variety of products and services, including life insurance, annuities and retirement-related services. For more information about Prudential, please visit news.prudential.com.
*Pensions & Investments’ Top Money Managers list, May 28, 2018; based on Prudential Financial total worldwide institutional assets under management as of Dec. 31, 2017. Assets under management (AUM) are based on company estimates and are subject to change.
© 2019 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.
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