The Canada Pension Plan Investment Board (CPPIB) is taking a stake in a retail property scheme in Birmingham.

The Canadian institution acquired a 50% stake in Hammerson’s Grand Central mall in the UK’s second-largest city.

The latter last month said it was paying £335m (€441m) for the mall.

Hammerson said the two investors would each hold stakes worth £175m once the deal was completed.

CPPIB’s managing director and head of real estate investments in Europe, Andrea Orlandi, said the joint venture demonstrates the institution’s long-term commitment to the UK and regional markets around the country.

The 435,000 sqft centre, which opened in September last year, includes a 250,000 sqft John Lewis department store.

Hammerson and CPPIB will hold the 150-year lease, with the former asset-managing the scheme, part of Birmingham’s £750m New Street station-regeneration project.

The centre’s retail space is close to being fully let, with 96% occupancy.

Annual net rental income is £13.9m.

CPPIB and Hammerson are already present in Birmingham, having jointly invested in the nearby Bullring centre in 2013.

Hammerson director of retail development, Robin Dobson, recently told IPE Real Estate the 1.3m sqft Bullring – completed in late 2003 – could benefit from its position, equidistant to Grand Central and HS2’s Curzon Street terminal.

“The Bull Ring is well-positioned between the station and HS2,” he said. “We certainly see the potential for strong growth.”

To read more on Birmingham, see this month’s City Focus