CPPIB and Hermes form €233m UK regional JV

Canada's federal pension scheme has teamed up with London-based investment manager Hemes Real Estate on the €233 mln Wellington Place city centre regeneration project in the English city of Leeds.

Under the new agreement Hermes and Canada Pension Plan Investment Board (CPPIB) will commit equity to the project on a 50:50 basis, for a total gross development value in excess of £185 mln (€233 mln).

Located in the centre of Leeds, Wellington Place is being developed and managed by London-listed property company MEPC, which will continue to run the project under the new partnership. The master plan envisages 140,000 m2 of commercial, retail, leisure and residential space.

MEPC has successfully leased the majority of the first buildings that were recently completed and is now in active discussions with office occupiers for further phases.

Chris Taylor, CEO of Hermes Real Estate, said: 'Our partnership with CPPIB in London has grown significantly since its establishment in July 2013 and it is a natural next step for both parties to develop the partnership further. Hermes Real Estate has recently demonstrated its commitment to the regional U.K. property market through a series of major urban renewal schemes in Birmingham, Leeds and Manchester, and as a like-minded long-term investor, CPPIB is the right partner to take the Wellington Place project forward with us.'

At end-September 2014 CPPIB had CAD 234 bn (€165 bn) of assets, of which CAD 25 bn is invested in real estate.