NORTH AMERICA – The Canada Pension Plan Investment Board (CPPIB) is expanding into the Nordic region for the first time.
The pension fund has signed an agreement to jointly acquire the Kista Galleria Shopping Centre in Stockholm.
The deal is being done in conjunction with Citycon Oyj, a major owner and operator of retail assets in the Nordic and Baltic countries.
The amount to be invested by CPPIB is approximately CAD177m (€135m).
Graeme Eadie, senior vice-president of real estate investment at CPPIB, said: "We look forward to partnering with Citycon on future investment opportunities in the region, as we continue to expand CPPIB's retail portfolio in Europe."
The two parties will each own a 50% stake in the property, which is scheduled to be completed some time next month.
Nils Styf, CIO at Citycon, said: "The involvement of CPPIB, a leading global institutional investor with a premier real estate portfolio, adds a seal of quality to this acquisition and also to Citycon as a professional manager of shopping centres in the Nordic region.
"Both parties consider Kista Galleria to be the first step in an ongoing joint investment platform."
CPPIB would appear to be fond of the Swedish market. In an email, Eadie wrote that Sweden was one of the most "resilient and prosperous" European economies.
"The investment we made is an excellent opportunity to invest in a high-quality, well-maintained shopping centre, considered to be one of the top shopping centres in Sweden," he said.
CPPIB has invested in two other major retail properties in Europe before the deal with Kista Galleria – the Westfield Stratford City Shopping Centre in London and the CentrO Shopping Centre in Oberhausen, Germany.
The pension fund is planning to buy into more shopping centres in Europe in 2013, as well as invest in all of the major markets in Europe for a mixture of retail, office buildings and industrial properties.
The pension fund has a real estate portfolio valued at CAD18bn, through the end of September.