Resolution seeks platform to expand

Resolution Property is aiming to acquire a real estate-related platform in either the UK or Germany within the next year as it looks to expand. “It may be just a regular asset-management platform that we buy with an existing portfolio that we can improve, or it might be something more specialist such as in tourism – we’ve looked at hostels in the past and that’s something that’s quite interesting to us,” says chief executive Robert Laurence. If Resolution did take over a tourism-focused platform, there would be a synergy with its main backer, Chinese conglomerate and investor Fosun, which owns all-inclusive holiday specialist Club Med and has a circa 17% stake in struggling travel firm Thomas Cook. Resolution itself also has experience in the tourism sector. It built Berlin’s Soho House and is currently developing a Hyatt Place hotel with Berkeley Capital Group in Aldgate, E1. See also: Resolution launches €200m equity fund Healthcare and co-working are other platforms that may tempt investment from Resolution. Fosun already owns a healthcare business in China, which Laurence says could be interesting to expand in Europe, and with some 50% of Resolution’s £1.2bn of assets under management in the office sector, it would be remiss of it not to consider and invest in co-working given its ongoing growth. This focus on expanding Resolution’s offering comes as it launches a €200m (£173m) equity fund targeting core-plus real estate in the UK, Europe and Switzerland. It is the second fund launched by Resolution this year, taking it to five active funds – albeit two are in the process of being divested. Resolution’s main fund, which is backed by Fosun, is still in acquisition mode with €675m  invested to date on properties that include the Royal Exchange in the City of London (£45m), EC3, Moretown, a 560,000 sq ft mixed-use office campus in Wapping (circa £300m), E1, and a 32,000 sq ft office building in Frankfurt. Laurence says the firm’s acquisition strategy across its funds is to target buildings with income and room for improvement, buildings that are able outlive the short term volatility that Brexit is causing. “We are keen to be buying in the UK as the well-documented slowdown in the capital markets is presenting a few opportunities,” says Laurence. “They’re not that plentiful, but there are projects that we like and that are good value, that have the stability to outlive the short-term volatility of Brexit, if it eventually happens.” He adds: “A lot of international money has decided that it’s quite nervous about the UK – certainly a lot of North American and Canadian money is nervous about the UK – so anything that has a certain element of complexity to it, which is our bread and butter, where we can get comfortable with a leasehold structure or some building improvements, is not being crawled over by capital markets. That gives us the opportunity to jump in.” And with €200m of new money in its latest fund to spend and a backer in Fosun, which mostly recently posted record profits of £1.5bn and has a hunger to grow, Resolution should feel like a tightly coiled spring, ready to act when opportunities to invest present themselves. To send feedback, e-mail louise.dransfield@egi.co.uk or tweet @DransfieldL or @estatesgazette