GLOBAL - A joint venture between Dutch pension fund manager APG and the Canada Pension Plan Investment Board (CPPIB) has acquired retail real estate worth £870.5m (€1bn) on the East London 2012 Olympics site.
The joint venture acquired 50% of the retail component of Westfield Stratford City, which, when completed, will be the largest urban shopping centre in Europe.
Developer Westfield will retain ownership of the adjacent development site.
Robert-Jan Foortse, head of European non-listed property at the €250bn Dutch pension fund manager, said: "We have invested only in the retail component because, from the outset, both APG and CPPIB were primarily looking to increase their exposures to prime UK retail centres. "
Once we had started to investigate this opportunity, we did look at the non-retail component, given that it is such an integral part of the scheme.
"However, once we had become more familiar with all the elements of the scheme, and especially when we had noted the long datedness of certain elements of the non-retail component, we realised this added so much complexity to the underwriting that we decided to focus on the retail only."
However, he did not rule out investing in parts of the non-retail development at a later stage.
An APG spokesman said the acquisition was "absolutely not just about the Olympics".
He said: "It's a long-term investment for us. Of course, the Olympics will be a catalyst to development. But when it is ended, there are large opportunities for the future development of the asset and its surroundings."
This is not the first time APG has teamed up with CPPIB, which has assets under management worth CA$138.6bn (€99.7bn).
The two investors recently joined a consortium seeking to acquire a €846m Australian industrial portfolio from ING Real Estate Investment Management.