AUSTRALIA/CANADA - The Canada Pension Plan Investment Board has teamed up with Australia's Future Fund to contribute A$750m ($665m) to Colonial First State Global Asset Management's restructured retail property fund.
The fund has an A$1.1bn portfolio consisting of nine shopping centres across Australia, providing 230,000sqm of retail space, with a combined annual sales turnover in excess of A$1.9bn.
As part of the financing deal, Colonial First State will rename the Direct Property Investment Fund Retail Sector as the CFSGAM Property Retail Partnership. Canada Pension Plan Investment Board (CPPIB) and the Future Fund will join remaining investors in the restructured retail property investment vehicle.
CRP currently comprises a portfolio of predominantly regional and sub-regional shopping centres located across Australia. It includes interests in Rockingham and Midland Gate shopping centres in Western Australia, Grand Plaza and Runaway Bay shopping centres in Queensland and the Myer Centre Adelaide. The portfolio provides 230,000sqm of retail space, with a combined annual sales turnover in excess of A$1.9bn.
Head of property Darren Steinberg, said the recapitalisation of the DPIF Retail Sector, which was undertaken to meet the changing needs of investors, provided existing unit holders with the option of exiting or remaining in the fund.
"An exit strategy for those wishing to reallocate their capital was achieved by securing equity from new investors," he said.
The deal is the latest in a series of investments CPPIB has made in Australia.
Last month, the pension fund said it was making a A$3.4bn proposal to acquire Australia's Intoll Group, which owns a number of toll highways, (Global Pensions: 15 July, 2010) and in May it announced it would take an 80% interest in a real estate joint venture called the Goodman Australia Development Fund (Global Pensions: 17 May, 2010).
Last year the fund and its partners made a A$4bn bid to take over another Australian toll operator, Transurban Group, which was later rejected (Global Pensions: 05 November 2009).
"Australia is somewhat similar to Canada in that it's relatively small in size and these opportunities don't come along very often, so we think it's a very good one for us," Graeme Eadie, CPPIB's senior vice-president of real estate investments told reporters.
"Retail properties around the world are very highly valued and don't trade very often, so any time we get an opportunity, we certainly take a very serious look at it."
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