Grosvenor teams up with Canadians on London development

Grosvenor Fund Management (GFM) is teaming up in a joint venture with Canadian pension fund giant CPPIB to invest up to £200 mln (EUR 227 mln) in London's West End office market over the next two years.

CPPIB will invest £190 mln in the venture, with GFM adding £10 mln and taking the lead on asset sourcing and management activities. The partnership’s strategy is to invest in 'value-add opportunities' in the West End and Midtown.

Wenzel Hoberg, CPPIB's managing director and head of Real Estate Investments - Europe, said: 'This investment aligns with our existing European real estate investment strategy and introduces us to a well-respected partner in Grosvenor Fund Management, which has a unique knowledge of the West End office market and strong active management and refurbishment expertise.'

CPPIB manages EUR 109 bn of assets on behalf of the 17 million Canadian contributors and beneficiaries of the Canadian Pension Plan. In recent years CPPIB has been one of the heavyweight institutional investors behind many large real estate deals in Europe. In May this year, CPPIB invested some EUR 270 mln to acquire a 50% stake in the massive Centro Oberhausen shopping centre in Germany. Late last year, the pension scheme joined forces with its Dutch counterpart APG to acquire 50% of the retail component of Westfield Stratford City at the site of the 2012 London Olympics for about EUR 1 bn.

GFM has also been active on the Continent of late. Earlier this month, the fund manager led the consortium that concluded the EUR 416 mln acquisition of shopping centres in Sweden and France from European listed property company Unibail-Rodamco. The consortium members were GFM, Bouwinvest REIM, on behalf of BPF Bouw, the Dutch pension fund for construction workers, and a major Canadian institutional investor.

Part of international property company Grosvenor, GFM had 24 funds and separate accounts with EUR 4.3 bn of assets under management at end-December 2010.