GLOBAL – Caisse de dépôt et placement du Québec's CAD30bn (€22.2bn) real estate subsidiary says it will consider more CMBS deals following its acquisition this week of a City of London asset for £265m (€306.2m).
The subsidiary, Ivanhoé Cambridge, acquired the City of London's Woolgate Exchange via a CMBS restructuring as part of a joint venture with TPG, which last year agreed to pick up the junior loan on the asset from the Irish Banking Resolution Corporation.
It subsequently negotiated with junior and senior creditors to come up with a proprietary transaction.
A spokesman for Ivanhoé suggested TPG would be involved in future CMBS acquisitions for the pension fund in the UK capital.
He said investing CMBS was "not a common occurrence" for Ivanhoé.
But he added: "With the right risk and return, we may be looking at those more often. The London market is always a challenge to penetrate, and we must be strategic in our approach to the market.
"We prefer to be at the right place, at the right time, and to pay the right price for the right asset. In the case of Woolgate, all the criteria were met, and the transaction aligns itself perfectly with our strategic plan."
That plan is to "reposition" its CAD6bn European portfolio with a focus on London, where it plans to open an office.
Ivanhoé said this week it would be premature to release details of the planned office, but its overall strategy would focus on "geographical critical mass, more concentration, less dispersal and more coherence".
Woolgate takes Ivanhoé's London acquisitions over the past 12 months to £400m.
The spokesman said the fund was unfazed by pricing in the capital, especially for trophy assets.
"London, like New York City, is a highly attractive, deep and liquid target market that satisfies all of our investment criteria," he said.
"The opportunities provided by this market are an excellent chance to grow the value of our portfolio and generate attractive returns for our depositors."
