BT pension scheme to sell UK real estate investments

LONDON, Oct 8 (Reuters) - BT's (BT.L) pension fund manager said on Monday that it has put some of its British real estate assets worth 240 million pounds ($489 million) up for sale to fund property purchases abroad.

A spokesman for Hermes Pensions Management Ltd said stakes in 10 real estate funds would be divested in order to part-finance around 700 million pounds for an international real estate investment programme.

"Hermes commenced an overseas investment programme at the end of last year in anticipation of relative outperformance of international real estate markets compared to the UK market," the spokesman said.

"The proposed disposal of a balanced portfolio of market leading investment funds will contribute to funding this diversification."

Hermes said the interests on offer totalled over 240 million pounds, representing some 17 percent of the British Telecom Pension Scheme's total holding in these vehicles and would be offered as a complete portfolio or in one or more tranches.

British institutional investors have increasingly been looking to diversify their real estate assets abroad as evidence grows that an extended UK property bull market has run its course and UK property returns could slow.

Analysts at Morgan Stanley said sales of the BT real estate assets would provide direct evidence of how much yields on UK property had moved up since a global credit crunch began.

A Hermes spokesman said one of the investments up for sale was a stake in the fund which owned the Bluewater shopping centre in southeast England -- one of Europe's biggest malls.

The announcement follows British Land Co Plc (BLND.L)'s decision last week to withdraw its plan to sell a stake in its flagship 1.64 billion pounds Meadowhall shopping centre due to the uncertainty in the financial markets.

(See www.reutersrealestate.com for the global service for real estate professionals from Reuters).

(Reporting by Kate Holton; Reuters messaging: kate.holton.reuters.com@reuters.net; +44 20 7542 8560)) ($1=.4907 Pound)