The sale of ING Real Estate Investment Management is a step closer after parent ING Group appointed Morgan Stanley to sell the business.
According to a report by UK commercial real estate magazine, Estates Gazette, the platform, which has €64.4 billion of assets under management across a number of investing strategies, has already courted attention from prospective bidders. While Morgan Stanley is to market the platform in its entirity, some bidders may be more interested in acquiring ING REIM's regional businesses.
Citing unnamed market sources, EG said bids could come from private equity real estate firms such as Blackstone and BlackRock as well as more traditional private equity firms including KKR and TPG.
Both KKR and TPG have been rumoured to be mulling moves into real estate of late. KKR was believed to have sounded out former Morgan Stanley Real Estate Investing co-global head Sonny Kalsi to take a leading role in establishing its presence in the market before he left Morgan Stanley to ultimately set up on his own. TPG has arguably been more actively pursuing real estate investments. Last month, it was reportedly one of the bidders for Japanese apartment developer Anabuki Construction, in May it was reportedly part of a consortium with Starwood Capital Group and Five Mile to buy hotel group Extended Stay. It was also involved in purchasing a large amount of Corus bank loans alongside Starwood Capital Group earlier this year.
ING REIM was previously to be divested before 2014 as part of a wider plan by ING to separate its banking and insurances businesses. In October last year, the financial services giant said it would focus on its core banking operations following pressure from the European Commission over the €10 billion of state aid it received. ING REIM was placed in its investment management division – then part of the insurance business to be hived off.
In February this year, however, ING REIM was removed from the insurance platform in a bid to reduce the complexity of integrating it and became a separately-managed entity within ING’s banking division. Despite that, a spokesperson confirmed to PERE then that it was still considered non-core.
ING declined to comment.