Hines offering real estate portfolio for sale: report

London

AN office building leased by Morgan Stanley in London's Canary Wharf district is being offered for sale by US real estate company Hines as part of a US$5.5 billion property portfolio disposal, according to a person with knowledge of the matter. The Houston-based company, which manages US$89.1 billion, has hired Lazard Ltd to advise on the sale of the properties in the Hines Global Reit, the person said. The real estate investment trust, which isn't publicly traded, owns all or part of 43 properties.

Hines Global Reit said it's evaluating a sale of assets, a sale or merger, a listing of shares on a national securities exchange or similar transaction in a March 28 filing to the SEC. There's no set timetable, a spokesman for the firm said.

US commercial real estate values fell in February, the second consecutive month of declines following a six-year streak of uninterrupted increases, according to an index by Moody's Investor Services and Real Capital Analytics Inc. Total return from London investment properties, which combines changes in real estate values and rental income, was 1.54 per cent in the three months through March, the lowest since 2009, according to MSCI data.

About 62 per cent of the Global Reit properties by value are in the US, 15 per cent is in the UK and the remainder is split between Australia, Germany, Poland, France and Russia, according to Hines' website. The Global Reit's stake in the properties for sale is valued at about US$5.3 billion, the company said in March, with the remainder held by venture partners in some of the properties. Morgan Stanley's office at 25 Cabot Square in London and the headquarters of Gap Inc's Old Navy brand in San Francisco are among the buildings owned by the Reit. BLOOMBERG