GLOBAL - The CPP Investment Board (CPPIB) has recently made several investments in the real estate sector, acquiring stakes in a string of commercial centres in Germany and the US.
The Canadian pension fund has acquired a 50% stake in a German regional shopping and leisure centre, CentrO Oberhausen, through a joint venture with the Stadium Group.
CPPIB made an equity investment of €270m to buy this interest.
Stadium Group will retain a 50% ownership and continue to manage the shopping and leisure centre.
CPPIB's senior vice-president of real estate investments Graeme Eadie said: "Our joint venture with Stadium is fully aligned with our European real estate investment strategy and represents a rare opportunity to invest alongside a proven, reputable partner in a high-quality shopping centre that has a history of income growth and demonstrated resilience to economic downturns and inflation."
CentrO is a 1.6m square foot (150,000 square metre) shopping and leisure centre, located 40 kilometres north of Dusseldorf.
The joint venture is looking to develop the commercial centre and plans to complete an 180,000 square foot extension by the end of 2012.
The extension is expected to attract an additional customer profile to the shopping centre.
Moving to the US, CPPIB has also acquired a 36.9% interest in the Mayflower partnership from institutional investors for a total equity investment of $350m (€248m).
The Mayflower partnership owns a $2bn portfolio comprising 13 regional malls located in the US mostly throughout the New England area, including top-tier properties such as Northshore Mall in Massachusetts and the Mall at Rockingham Park in New Hampshire.
Under the agreement, the Canadian pension fund will partner with two main investors: the largest US retail REIT, Simon Property Group, and the institutional real estate owners Teachers Insurance and Annuity Associated - College Retirement Equities Fund (TIAA-CREF).
Both Simon Property and TIAA-CREF will retain their existing interest in the Mayflower partnership, which stand at 49.1% and 14%, respectively.
Simon Property will continue to manage the assets on behalf of the partnership.
CPPIB's head of real estate investments for the Americas Peter Ballon said: "This investment represents CPPIB's first major regional mall acquisition in the US, and we view this as an attractive entry point into the sector. This is also an excellent opportunity to partner with a leading management team and experienced institutional investor."
He added: "Our overall objective is to build a portfolio that will deliver stable returns and retain its relative value across multiple business cycles. The Mayflower portfolio meets these criteria."
