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. Last Updated: 07/27/2016

GE Real Estate Puts $50M Into Heitman

BOSTON -- GE Real Estate, the world's biggest publicly traded real estate company, said in a statement Friday that it invested $50 million in Heitman Russia Property Partners, a new fund and its first in the country.

GE Real Estate, based in Norwalk, Connecticut, joins Chicago-based Heitman and two unidentified institutional investors in the fund, which will have $150 million in equity. Heitman will be acting manager of the leveraged fund, which will have a seven-year life.

"Not only are we investing alongside good partners but we also have a very experienced manager in the form of Heitman, whose experience with capital and network of contacts will be invaluable," Olivier Piani, president of GE Real Estate Europe said in the statement.

Russian commercial-property investment may rise as much as 40 percent this year, according to Jones Lang LaSalle. The fund will buy development and refurbishment projects in retail, office, warehouse and residential real estate sectors, GE Real Estate said. About 60 percent of the fund's capital will be invested in partnerships with Russian developers, the other 40 percent in completed projects that offer "suitable" returns.

"We are very excited to be entering the market through this fund, which will align our interests along with those of local Russian developers on individual projects," Karim Habra, managing director of GE Real Estate Central and Eastern Europe, said in the statement. "In an equity- and debt-hungry market we believe this will provide us with an important point of difference to other investors operating within the market."

GE Real Estate has about $62 billion in assets with more than $1 billion invested in Central and Eastern Europe.

The division provided $1.84 billion in 2006 profit on $5.02 billion in sales, making it one of the parent company's more profitable and faster-growing units.

(Bloomberg, MT)