CANADA/GERMANY/US - The Canada Pension Plan Investment Board (CPPIB) has acquired holdings in a string of shopping centres in Germany and the US.
The investment board has taken a 50% stake in German shopping and leisure centre CentrO Oberhausen for €270m ($385m)and a 36.9% interest in US shopping mall owner the Mayflower partnership for $350m.
CPPIB acquired the stake in CentrO Oberhausen from Stadium Group, who will retain its 50% interest in CentrO and will continue to manage the shopping centre.
CentrO is a 1.6 million-square-foot (150,000-square-metre) shopping and leisure centre 40km north of Dusseldorf, attracting shoppers from both Germany and the Netherlands.
CPPIB senior vice-president, real estate investments, Graeme Eadie said: "We are very pleased to be acquiring a significant interest in what is widely regarded as one of the top large-scale regional shopping centres in Europe.
"Our joint venture with Stadium is fully aligned with our European real estate investment strategy and represents a rare opportunity to invest alongside a proven, reputable partner in a high-quality shopping centre that has a history of income growth and demonstrated resilience to economic downturns and inflation."
Closer to home, the Mayflower partnership owns a portfolio consisting of 13 regional malls located in the US, mostly throughout the New England area.
Through the acquisition, CPPIB will become partners with Simon Property Group, the largest US retail REIT, and Teachers Insurance and Annuity Associated - College Retirement Equities Fund, one of the largest institutional real estate owners in the US. They will both retain their existing interests of 49.1% and 14% respectively. Simon Property Group, Inc. will continue to manage the assets on behalf of the partnership.
Peter Ballon, CPPIB's vice-president, head of real estate investments - Americas, said: "This investment represents CPPIB's first major regional mall acquisition in the United States and we view this as an attractive entry point into the sector. This is also an excellent opportunity to partner with a leading management team and experienced institutional investor.
"Real estate is an attractive investment for the CPPIB. Our overall objective is to build a portfolio that will deliver stable returns and retain its relative value across multiple business cycles. The Mayflower portfolio meets these criteria."
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