ES Real Estate, one of the largest real estate managers in the UK with over $9.3bn (£5.8bn) assets under management, has entered the US property market for the first time, in a move to diversify its real estate investments.
Hermes has teamed up with Hampshire Real Estate, a private US investment company and United Overseas, a Singaporean bank to launch a new closed-end commercial real estate income fund.
Chris Taylor, chief executive of Hermes Real Estate Investment, said the fund will focus on “under the radar” areas outside of major city business districts, primarily in the east of the US.
“The yield profile is materially higher than we would typically see in some city centres today given weight of capital targeting these markets,” he said.
Hermes will invest up to $150m capital on behalf of the British Telecom Pension Scheme, with UOB and Hampshire each committing $25m.
Taylor said the US is the first step in a strategy to diversify into core global markets, with France and Germany next on the agenda.