CANADA - Canada Pension Plan Investment Board has agreed to buy a 50% stake in Europe's largest retail complex, CentrO near Dusseldorf, Germany, for about €700m ($949m), according to three people with knowledge of the transaction.
Canada's second-largest public pension manager signed a contract to purchase the stake from British billionaire property developer Eddie Healey, according to the three people, who asked not to be identified because the transaction is private.
Healey's agent didn't return three telephone calls seeking comment, while Toronto-based CPPIB declined to comment.
CentrO, located in Oberhausen about 30km northeast of Dusseldorf, has 72,300 square metres of space with more than 200 shops. It opened in 1996 and work started in January on an 18-month expansion programme. Apple Inc., which opened an outlet there in September, is among the tenants.
The 205-acre site has an aquarium, a recreation park, a marina, parking for 14,000 cars, a 12,000 seat arena, a hotel, a theatre exhibition centre and a business park, according to CentrO's website. It attracts about 20 million visitors each year.
German retail properties will probably be the most popular type of real estate in Europe for international investors this year, according to a survey last month by INREV (Global Pensions: 25 January 2011). The country's export-led economic recovery is boosting employment and giving consumers greater confidence.
Investors are favouring large, dominant malls where retail sales exceed national averages and help generate secure rental income that supports property values. Retail-related real estate deals rose by 59% in Europe last year to $33bn, according to data compiled by New York-based Real Capital Analytics.
The Canadian pension fund, which started investing in real estate in 2005, said this month that it owned properties worth C$9.2bn ($9.6bn), or 6.6% of its assets, at the end of 2010.
CPPIB acquired a 25% stake in the Westfield Stratford City mall next to the site of the 2012 Olympics in east London in November for about £436m ($700m). In the same month, it joined LaSalle Investment Management in acquiring a mall in the German city of Huerth, near Cologne, for €157.3m.
CentrO is the most valuable asset owned by Healey, who made his fortune developing a derelict industrial site on the outskirts of Sheffield, England, into the Meadowhall mall. He sold this in 1999 to British Land Co. in a deal that valued the property at £1.17bn.
The top stories this week were the High Court's decision to block the £12bn annuity transfer from Prudential to Rothesay Life, and a separate court ruling that 'raises the bar' for pension rectification exercises.
Guaranteed minimum pension (GMP) equalisation has soared to the top of pension schemes' to-do lists, with 58% stating it is a priority project, research from Equiniti has revealed.
Professional Pensions is holding its defined contribution (DC) conference on 4 September.