Canada’s Public Sector Pension Investment Board (PSP Investments) is to pay NZD1bn (€646m) for a property portfolio in New Zealand.

The portfolio of 18 properties will be sold to PSP Investments by AMP Capital on behalf of exiting investors. PSP Investments is awaiting approval from New Zealand’s Overseas Investment Office to conclude the purchase.

AMP said it would continue to manage the portfolio, which includes offices, industrial and retail assets, as well as development properties. The 60,000sqm Botany Town Centre and Manukau Supa Centre (40,000sqm) in Auckland are in the portfolio.

PSP Investments, which had CAD76.1bn (€52.4bn) of assets under management as of March last year, invests for the Canadian Forces, the Royal Canadian Mounted Police and the Reserve Force. Around 12% is invested in real estate, with a target weighting of 13%.

Most of its real estate investments are in the office sector, which accounted for 30.8% of its portfolio in March last year. Retail and real estate debt accounted for 7.4% and 7% respectively.

In Europe, PSP Investments has mandated AXA Real Estate to invest in London offices.

Earlier this year, PSP Investments bought a €472m portfolio of prime logistics assets and development land in Germany, Poland and France through its SELP joint venture with UK listed company SEGRO. The two firms are looking to grow their European portfolio to around €2bn.

Speaking on a panel at INREV”s annual conference in Berlin earlier this year, Stéphane Jalbert, managing director of real estate investments at PSP Investments, said it needed to be “very cautious” on how it deployed money.

“We are focused on core locations with value-added opportunities through repositioning properties,” Jalbert told delegates. “We prefer to be in city centres where there’s always appetite from those looking to buy.”

Last year, German developer Hochtief sold its airports division to PSP Investments for €1.5bn. The deal gave PSP Investments access to stakes in airports in Albania, Australia, Germany, Greece and Hungary.

PSP Investments last month said its president and chief executive, Gordon Fyfe, had stepped down after 11 years, with John Valentini appointed as his interim replacement.