GLOBAL - Canada Pension Plan Investment Board (CPPIB) has agreed to a nearly $5bn (€3.8bn) joint venture with Westfield that will see it acquire a portfolio of 10 malls in its largest single real estate transaction.
The agreement, covering 10 regional malls as well as two redevelopment sites in the Australian company's US portfolio, comes at the same time as the Canadian scheme entered a 50:50 joint venture with Land Securities to develop a retail, office and residential site in central London.
The deal with Westfield will see CPPIB gain a 45% stake in the $4.8bn portfolio for $1.8bn, with the scheme assuming all debt related to the portfolio, allowing Westfield to launch an on-market buy-back of as much as 10% of its shares.
Graeme Eadie, senior vice-president of CPPIB's real estate investments, hailed it as an excellent opportunity for the scheme to buy a "significant interest" in a portfolio of high-quality regional shopping centres.
"This acquisition represents our largest real estate investment to date globally and supports our retail real estate strategy of investing in dominant regional malls with best in class operators," he said.
The deal, expected to finalise towards the end of this quarter, almost doubles the number of US shopping centres in which CPPIB owns a stake.
Meanwhile, the public sector scheme's investment board has agreed to a joint venture with the UK's Land Securities that will see the redevelopment of a 5.5 acre site opposite one of London's main train stations.
The £163m (€194m) deal will see Land Securities sell the site to the Victoria Circle Limited Partnership, with demolition set to start no sooner than September this year when the last building has been vacated by its standing tenants.
Completion on the various aspects of the residential, office and retail development is expected between 2016 and 2018, with the site's final value estimated at £1bn.
Eagle said CPPIB was excited to be involved in the "transformative" project in a prime area of the city's West End.
"The Victoria Circle project supports CPPIB's real estate strategy to own and develop properties in key markets for the long term," he said.
As part of the joint venture, Land Securities will act as development manager and also oversee the leasing and sale of the units on completion.
As of the end of December, CPPIB's real estate portfolio was valued at CAD14.4bn (€10.9bn), accounting for around 9.5% of its CAD153bn in assets.