Caisse de dépôt merges property arms into $30b group

Canadian pension fund Caisse de dépôt et placement du Québec said on Tuesday it is merging its shopping centre unit, Ivanhoe Cambridge, and its office and residential subsidiary, SITQ, to create one group with roughly $30 bn (EUR 20 bn) of assets.

Active in 24 countries, the newly-created Ivanhoe Cambridge Group is one of the world's 10 largest real estate companies. According to Daniel Fournier, who was appointed Chairman and Chief Executive Officer of Ivanhoe Cambridge Group, the new group 'will improve its ability to compete internationally'. 'The single management structure will also promote knowledge sharing and collaboration between the operating entities, enhance career opportunities for our employees and strengthen support functions based on the best practices of both organizations,' he added.

Montreal-based Caisse de Dépôt said the consolidation of its real estate subsidiaries is part of 'its 2009 strategic plan to strengthen its foundations for the future'.

'With this initiative, we continue to streamline our practices to benefit even more from our clear comparative advantage in real estate: our operational expertise,' said Michael Sabia, president and CEO of Caisse. 'The real estate sector, which operates in a fiercely competitive market environment, is currently in a global consolidation phase. The changes announced today will enable us to fully utilize the expertise of our teams in their respective market segments to seize growth opportunities that can provide depositors with the long-term returns they need.'

Both Ivanhoe and SITQ will continue to operate independently, but will share corporate-oriented responsibilities, such as finance, human resources, governance and strategy.

SITQ's European activities are led by Meka Brunel and consists of roughly 460,000 m² across 15 high-quality properties in Paris, London, Düsseldorf, Munich and Frankfurt. Ivanhoe Cambridge has been active in Europe since 1997 and currently owns five retail properties in Germany, Russia and Spain with 310,000 m² of space. Last week, the company sold its 50% stake in Paunsdorf Center in Leipzig to MFI.

Caisse de dépôt et placement du Québec manages $152 bn of funds primarily for public and private pension and insurance plans.