AMERICAS - The Canada Pension Plan Investment Board (CPPIB) has acquired a $166.5m (€125.8m) interest in four US shopping centers through a joint venture with Kimco Realty Corporation.
CPPIB's joint venture with Kimco is not intended to end with the acquisition; both parties are looking to establish a long-term relationship.
Graeme Eadie, senior vice president of real estate investments for CPPIB, said: "We believe our association with Kimco will assist in finding substantial quality opportunities that we can jointly pursue. The combination of our joint market knowledge and capital plus their operating expertise will allow is to execute effectively as the opportunities arise."
CPPIB has specific criteria for future retail investments. Eadie explained: "We look for assets which are dominant in their markets, where there are limits on the ability to add competitive new supply and the trade area is well developed with reasonable growth prospects. These characteristics are more important than specific geographical areas."
Eadie said the newly acquired shopping centres were well located, anchored by strong tenants (including Wal-Mart and Costco) and "continue to perform well".
He stated: "The impact for retail properties has differed over various parts of the market. The highest quality assets in the stronger markets have been marginally impacted. Other assets in weak markets, and/or poorly located or configured, are facing problems."
The pension fund gets a 45% interest in return for the equity it contributed to the transaction. The total acquisition price for the purchase of the four properties was $370m.
Four of the five properties are located in California and one is in Florida, comprising over two million square feet of space in total.
CPPIB now has a real estate portfolio in the United States valued at $900m.
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