Tricon Residential and Canada Pension Plan Investment Board (CPP Investments) have partnered to invest up to C$500m (€334.6m) in housing projects in Canada.
The newly created venture, which will invest in build-to-core multi-family rental projects in the Greater Toronto Area, will be funded by up to C$350m of capital backing from CPP Investments for a 70% stake in the partnership and capital of up to C$150m from Tricon.
The total investment will enable the venture to develop 2,000-3,000 units at a gross development cost of C$1.4bn, including leverage.
Tricon, which will hold a 30% interest in the partnership, will serve as the developer, asset manager and property manager of the joint venture projects.
As its first project, the joint venture expects to develop a C$600m project consisting of two towers on a 1.8-acre site. The total development cost includes C$192m of equity capital contributed from the joint venture.
Construction is expected to commence on the site in early 2022 with completion expected in 2025, pending closing of the transaction.
Gary Berman, president and CEO of Tricon Residential, said: “The joint venture will increase the stock of private rental housing, a stated goal of the City of Toronto and Provincial Government, and will play an important role in enhancing the City’s vibrancy and livability.
“Toronto’s compelling long-term rental fundamentals are firmly in place, including high population growth, a diverse economy, and increasingly stretched home prices. The current dislocation we are seeing in the land market presents an opportunity to source attractive development sites and provide high-quality rental apartments that respond to the needs of today’s renters, with relatively large livable suites, extensive amenities, and lifestyle programming (including virtual offerings) that contribute to a sense of resident community.”
Hilary Spann, managing director and head of real estate Americas at CPP Investments, said: “The Greater Toronto Area continues to experience significant undersupply of purpose-built rental properties, and even less stock of modern, institutionally owned and operated rental properties,”
“We see a long-term opportunity to build and invest in properties alongside Tricon, a well-respected owner, developer and operator in the region, to meet this need with newer multi-family properties in transit-oriented locations.”
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