CANADA - The Canada Pension Plan Investment Board has expanded its real estate portfolio with $1.4bn worth of new investments, bringing the fund's total real estate commitments to $8.4bn.
The $127.7bn pension fund has invested in four real estate funds, including a Morgan Stanley global fund and a Blackstone European fund, and revealed it will soon announce a further acquisition in the Middle East.
Joel Kranc, a spokesperson for CPPIB, said: "CPPIB is well-situated to take advantage of the turmoil in the capital markets. We are seeing attractive real estate investment opportunities that were not present before."
The pension fund plans to concentrate on investing in the United States and United Kingdom over the next two years.
"The assets we are seeing come to market are high quality assets that traditionally would not be available for sale and are quality assets that are being offered at discounted prices or lower valuations," said Kranc.
As of 30 June 2008, real estate made up 5.6% of the CPPIB's assets. Its real estate portfolio is made up mostly by office and retail commercial properties located primarily in Canada and the UK but also in the United States, Europe and Asia.
Only last week, CPPIB announced it had acquired a 37.5% non-managing ownership interest in Calgary's East Hills, phases I and III, for a reported $28.5m from RioCan Real Estate Investment Trust and Trinity Development Group Inc.
Graeme Eadie, senior vice president of real estate investments for CPPIB, said: "As a long-term investor, the CPPIB seeks out high quality assets which will generate revenue and help pay future retirement benefits. The East Hills Development will, as a part of our larger real estate portfolio, help secure our future returns as we build assets in the Canada retail sector."
The site is expected to feature 1.2 million square feet of new format retail space, with the majority of construction due to be completed between 2009 (phase I) and 2012 (phase II).
The CPPIB's real estate partners include The Blackstone Group, ING REIM and LaSalle Investment Managers.