Hines deepens investments in Asia Pacific, third generation steps up
By Cecilia Chow
/ EdgeProp Singapore |
Hines-Pierce: I'm really excited to be stepping into the role of Co-CEO and carrying on my grandfather's legacy (Photo: Hines)
SINGAPORE (EDGEPROP) - Laura Hines-Pierce, newly appointed co-CEO of global real estate firm Hines, believes that trophy office towers are still a great investment opportunity. “Demand is incredibly high for quality, trophy buildings in core locations,” she says. “The office isn’t dead. It’s reimagined.”
See also: Hines acquires logistics asset in Nagoya
Hines is one of the biggest real estate firms in the world, and has over the past 65 years developed more than 154 million sq ft of office developments, not to mention another 152 million sq ft acquired and over 39 million sq ft under development, with 159 million sq ft under management. “Our clients and tenants are very focused on how they can get their employees back together, because the most important work that we do as a firm is creative, collaborative, innovative thinking, and work that propels the growth of the firm,” adds Hines-Pierce. “That happens best in person.”
To that end, these companies are looking for “high-quality, best-in-class office space with hospitality experience” that will attract their employees back to the office. “The majority of our office buildings are in that space,” she adds.
An example of a premium office tower in Asia developed by Hines is One Museum Place in Shanghai, China. Located next to the Natural History Museum and Jing’an Sculpture Park, it is a 1.4 million sq ft, 60-storey office tower with a six-storey retail podium. The building opened in September 2019, and features spacious interiors, open green spaces and views of the Luijiazui skyline. It was one of the first towers in Shanghai to receive LEED Platinum certification, the highest rating in sustainability.
February marked two significant milestones for Hines-Pierce: the firm celebrated its 65th anniversary and she joined her father Jeff Hines as co-leader of the business founded by her grandfather, the late Gerald D Hines, in 1957. “I’m really excited to be stepping into the role of co-CEO and carrying on my grandfather’s legacy,” says Hines-Pierce. “When he founded the firm, he made its name in CBD office developments nationally across the US, and that was what we became known for.”
A premium office tower in Asia developed by Hines is One Museum Place in Shanghai, China (Credit: Hines website)
Going global, fully diversified
When her father Jeff Hines, chairman and co-CEO of Hines, took the helm in 1990, he led the charge into the global arena. Under his leadership, the firm expanded across all four real estate classes — residential, retail and hospitality as well as office. The firm ventured into investment management and real estate services too. “We really became a fully diversified, global firm under my dad,” says Hines-Pierce. “So I’m very excited to be partnering him, and bringing a fresh perspective in thinking about the next 30 years.”
Being part of the generation that has grown up with a focus on technology, innovation and environmental, social and governance (ESG), Hines-Pierce has been thinking about the client experience too. “That’s something that I’m really focused on: how we can lead in new ways in the real estate industry, and lead Hines into the next generation.”
Today, the Houston-based global real estate firm is one of the biggest privately held real estate companies in the world, with a presence in 255 cities across 27 countries and total investments under management of US$83.6 billion ($112.5 billion). It has more than 171 developments underway around the world and over 4,800 employees. About 40% of the staff are under the age of 35. “I think that’s reflective of the workforce today,” says Hines-Pierce.
She joined the office of the CEO two years ago, and prior to that, was the firm’s transformation officer, working with the co-heads of investment management. The firm is seeing “a lot of opportunities across the world”, says Hines-Pierce.
Hines’ first foray into the Asia Pacific region was in China, where it opened an office in Beijing in 1996. Its offices in Seoul and Tokyo opened in 2013 and 2017 respectively. The office in Hong Kong opened in 2019, and it became the Asia Pacific headquarters. This was followed by an office in Singapore in 2020. Since then, the firm has expanded to 15 cities across the region, employing close to 200 people, with US$4.2 billion of assets under management.
The firm has been on a buying spree since the launch of its three new flagship funds across Asia Pacific, Europe and the US last year. With equity amounting to US$4.8 billion, this translates to total purchasing power of US$10.8 billion. Hines-Pierce was involved in the launch of three flagship funds together with Hines co-heads of investment management, David Steinbach and Christopher Hughes.
Bukit Batok Connection, purchased in January in a joint venture with DWS for $93.8 million marked Hines' maiden acquisition in Singapore (Credit: Hines website)
Keen competition for logistics assets
In Singapore, Hines’ maiden acquisition is Bukit Batok Connection, which it purchased in January in a joint venture with DWS for $93.8 million. The 378,000 sq ft, nine-storey industrial asset was part of the Soilbuild Business Space REIT, an industrial trust which Blackstone and Soilbuild had privatised. The building has 20 years left on a 30-year lease from November 2012.
In South Korea, Hines has two developments underway. The first is the 460,000 sq ft Namyang Logistics Centre located at Hwaseong in Greater Seoul. The second is the development of Iljuk Logistics Centre, a four-storey, one million sq ft, cold storage and logistics project located on the border of Anseong and Icheon.
Last May, Hines acquired its maiden property in Japan on behalf of its pan-Asian fund, Hines Asia Property Partners (HAPP). It is a 17-storey, 500,000 sq ft office building in Yokohama, named New Stage Yokohama. Renovations are underway to revitalise the 28-year-old building in order to appeal to both traditional and R&D users. The upgrading works are scheduled for completion by mid-2023.
Hines acquired a second property in Japan for HAPP earlier this month. It is Yatomi Distribution Centre, a two-building project in the port city of Nagoya. The existing property is a single-storey warehouse with 269,098 sq ft of space. It has a development site with the potential to construct a new, four-storey logistics building of 2.42 million sq ft.
“We have invested quite a bit in logistics in Asia,” says Hines-Pierce. “That’s something we continue to see a big opportunity in. However, competition is strong and industrial logistics assets are trading at record low cap rates. That makes it a bit challenging.”
One of the first projects that Hines-Pierce was directly responsible for at Hines as a project manager was River Point, a state-of-the-art, 52-storey office tower located in Chicago’s West Loop, with views of the Chicago River (Credit: Hines website)
Expanding footprint in built-to-rent
Hines has been active in Australia too. In December 2020, the firm acquired a prime site in central Melbourne for A$200 million ($194 million) for the development of a premium office tower with over 645,840 sq ft of office space.
Just last week, Hines was reported by Mingtiandi to have acquired its second built-to-rent project in Melbourne for A$30 million. The site was acquired from Singapore-listed property group City Developments and two Australian partners, namely Lechte Corp and consultancy Crema Properties. About 220 rental homes can be developed on the 33,024 sq ft site at 36-58 Macaulay Road, north of Melbourne’s CBD.
This deal comes just six months after Hines first ventured into the built-to-rent market in Australia, and acquired a site in Bruswick, North Melbourne, for A$16.5 million. The 45,715 sq ft site can be developed into a 250-unit apartment building.
“We do see a big opportunity in Asia Pacific for institutional investors to look at more built-to-rent property,” notes Hines-Pierce. “I think there’s really been a lack of built-to-rent products in this region, and that could be an interesting opportunity looking into the future.”
Hines acquired 260 Queen Street, a 139,000-square-foot office tower located in the heart of Brisbane’s core commercial district, the Golden Triangle, in July 2018 (Credit: Hines website)
‘Carrying on the legacy’
Prior to joining the family firm, Hines-Pierce had worked in New York at Sotheby’s in the Chinese contemporary art department and as a business administration manager. She had graduated from Duke University with a Bachelor’s degree in economics and art history, and an MBA from Harvard University.
“I loved my time there [at Sotheby’s],” she relates. “But I realised I was still much more excited about a career in real estate, [in] being part of the family firm and carrying on that legacy. That was when I transitioned back.”
One of the first projects that Hines-Pierce was directly responsible for at Hines as a project manager was River Point, a state-of-the-art, 52-storey office tower located in Chicago’s West Loop, with views of the Chicago River. The building is co-owned with Ivanhoe Cambridge and designed by Pickard Chilton Architects.
River Point has 1.1 million sq ft office space with floor plates of 25,000 sq ft. Amenities in the area include a 1.5-acre public park and landscaped riverwalk with a 150-car garage, retail, fine dining, fitness centre and a conference centre. The building opened in 2016. “That was my first baby,” says Hines-Pierce, who will soon be a mother of two.
Besides Hines-Pierce, her two brothers, Adam and Matthew, are also working for the family-owned firm. Adam Hines is currently in the capital markets division while Matthew Hines is part of a development team in the company’s west region. “The plan is that they will eventually join me in the CEO’s office,” says Hines-Pierce.
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