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Pension plan launches foray into U.S. real estate

Pension plan launches foray into U.S. real estate

The Canada Pension Plan Investment Board has made a major foray into U.S. real estate and expanded its holdings of regional shop-ping malls in a joint venture valued at $4.8-billion US.

The joint venture with the Westfield Group will see CPPIB take an interest in 10 regional malls, primarily in California, and two redevelopment sites. CPPIB's equity investment in the Westfield portfolio will be $1.8 billion US, representing a 45 per cent interest.

The transaction is expected to close during the first quarter of 2012.

"This acquisition represents our largest real-estate investment to date globally and sup-ports our retail real-estate strategy of investing in dominant regional malls with best-in-class operators," said Graeme Eadie, senior vice-president of real-estate investments at CPPIB.

Westfield Group will serve as the managing general partner for the joint venture and remain as the property manager, leasing agent and developer for the properties.

"We are pleased to partner once again with Westfield, a long-standing partner with deep expertise in both the U.S. and global retail sector," Eadie said.

He added that the portfolio of high-quality regional shopping centres are "well positioned for long-term growth."

With the completion of this transaction, CPPIB will become one of the largest institutional owners of regional shopping centres in the U.S. with interests in a total of 26 malls located in major urban markets. At the end of last year, CPPIB's real-estate investments totalled $14.4 billion, representing 9.5 per cent of the CPP Fund.

SOURCE: The Vancouver Sun