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Henderson Property - North America update

Henderson Global Investors has raised a further US$50 million for its latest US multifamily housing fund – CASA Partners V, taking it to a total of $155 million equity to date. It is targeting a total $250 million equity raise before its final closing date of 31 December 2012, representing an initial gross portfolio size of up to $750 million (including a maximum LTV of 65%).

Henderson Global Investors has raised a further US$50 million for its latest US multifamily housing fund – CASA Partners V, taking it to a total of $155 million equity to date. It is targeting a total $250 million equity raise before its final closing date of 31 December 2012, representing an initial gross portfolio size of up to $750 million (including a maximum LTV of 65%).



CASA V is the fifth in a series of successful US value-add multifamily housing funds that seek to provide high income returns and quarterly cash distributions to investors by integrating value-enhancing strategies with low-cost tax-exempt bond financing.



Henderson regards the US apartment market as one of the best-positioned sectors over the next five years. Multifamily housing is widely recognised as one of the nation’s largest and healthiest real estate sectors. Apartments are anticipated to have the most favourable occupancy and rent growth conditions of all asset classes. Institutional investors have significantly increased their ownership of the apartment asset class over the past two and a half decades due to its stable cash flows, diversification benefits and abundance of advantageous debt financing.



Jay Martha, head of Henderson’s North America property business, and co-portfolio manager for CASA V, said: “'Henderson’s CASA Fund series has been very well received by investors, having successfully invested, operated and liquidated through all points in the investment cycle. Testament to our expert management team and 18-year track record, combined with excellent initial CASA V investments, two of our first close investors have made additional commitments to the Fund.”



Since its launch, CASA Partners V has acquired seven apartment assets across its target markets, and has an active pipeline of further attractive investments. Total equity invested so far amounts to over $91 million with assets acquired in Illinois, Texas, Florida, Washington and North Carolina.


Recent sales (amounting to c. $93 million) from an earlier fund in the CASA Series include apartments in Washington DC, Delaware and Texas. These dispositions generated Net IRRs of 19.4%,10.6%, and 21.8%* for Henderson’s CASA II clients.



In addition, the core commingled Henderson North American Property Fund recently sold an office building in California for c. $12 million.



The business has also announced plans for a new institutional club investment opportunity targeting the US student housing market. The Henderson Student Housing Opportunity will invest in high quality by-the-bed student housing properties across target markets within the US, and has a current active pipeline of attractive investments.



Henderson will acquire and operate assets both directly and through joint ventures. For direct investments, third-party specialist campus property manager, Greystar, will be used for on-site management. Joint venture investments will be made in partnership with best-in-class student housing owner/operator, Pierce Education Properties, L.P., who will be responsible for the day-today management of those properties. Henderson’s experienced in-house asset managers will supervise the property management activities of both Greystar and Pierce.



AJ Richard, Director of Portfolio Management, Henderson North America, said: "Henderson believes the student housing sector possesses strong near-term demand/supply characteristics and is attractively priced relative to other sectors. By aligning with specialist student housing operators, Henderson is well positioned to access investment opportunities and deliver strong performance for its investors."



Henderson intends to acquire 8 or 9 assets, at an average purchase price of US$25 million, for an initial gross portfolio size of c. $215 million (including a target LTV of 50%).



* preliminary and subject to change; final audited results may vary



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