US - The $156bn California Public Employees Retirement System (CalPERS) and Rodamco North America (RNA) have teamed up to purchase three US shopping malls for a total of $1bn.
The deal, which is expected to close within the next 30 days, will see RNA and the pension fund giant take control of the Illinois-based Oakbrook Centre, the Century City Shopping Centre in Los Angeles, and the retail portion of the Galleria, a mixed use development in Houston. Under the terms of the joint venture, CalPERS will take a minority stake in the three malls and will assume a pro rata share of the existing mortgage payments.
Speaking about the deal, Daniel Szente, CalPERS chief investment officer, said: These malls are a welcome addition to our real estate portfolio. We've been able to capture a profitable segment of the retail market by partnering with a leading retail property investment company. These are quality properties that will offer us greater diversification in our real estate portfolio and the potential for strong returns.
Presently, CalPERS’ real estate portfolio is valued at $12.4bn, and represents approximately 8% of CalPERS total assets. Approximately $9.8bn is invested in office, retail, industrial and apartment properties. The pension fund’s housing, timber, franchise finance, and net-leased investments are valued at $2.6bn, whilst retail investments account for $2bn.
RNA has also announced that it has rejected Australian real estate group Westfield Holdings' plan to take over the management of its property holdings. Earlier this week, Westfield announced that it had bought a 23.9% interest in RNA from Dutch pension fund giant ABP. The external management plan, devised by ABP and Westfield, has been labelled by RNA as excellent for Westfield, but very bad for all other RNA shareholders.
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