NORTH AMERICA – QIC, a manager of long-term investments for the Queensland government in Australia, has formed a $2bn (€1.6bn) joint venture with Forest City Enterprises to recapitalise and invest in a portfolio of eight regional retail malls in the US owned by the REIT.
Once the deal has closed, Forest City said it expected to raise cash liquidity of around $300m after transaction costs have been paid.
The deal is expected to produce a cap rate of approximately 5.75%, based on the portfolio's estimated net operating income of 2013.
The agreement calls for Forest City to contribute its current ownership interest in each of the properties to the joint venture.
QIC will acquire 49% of those interests for cash, and this equity investment will be for $435.6m.
The deal marks QIC's first foray into the US retail real estate market.
Steven Leigh, managing director at QIC Global Real Estate, said: "Expansion into the US retail sector is a natural progression and comes after extensive investigation of the real estate market.
"Our recognised investment capability and global relationships enable us to continue offering local and offshore client access to quality opportunities of the scale and return profile that suit their global investing needs, such as this joint venture."
QIC said it planned to work with Forest City on a short and long-term basis on the portfolio and other deals in future.
It also said it would look for additional investment opportunities in North America.
"We will continue to build relationships with like-minded operators and/or owners as we have done with Forest City," Leigh said.
"Our focus at the moment is on North America. We see a good opportunity in the US to access quality retail stock, and there are reasonable properties for income growth."
QIC invests in large-scale shopping centres and CBD office buildings.
Its current global property portfolio has more than $10bn in assets.