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CPPIB puts E600m into retail

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The Canadian Pension Plan Investment Board (CPPIB) has bought two large shopping centres in Quebec: the Galeries de la Capitale in Quebec City and Carrefour de L'Estrie in Sherbrooke. The value of the deal was confidential but Land Registry sources suggest a price of CAN$820m (€600m).
The CPPIB has taken an 80% interest in the
shopping centres with minority partners Osmington and Westerkirk Capital taking a 20% stake.
The properties will be managed by Redcliff Realty Management, a wholly-owned subsidiary of Osmington.
Graeme Eadie, real estate vice president for CPPIB said: “It’s a rare opportunity when shopping centres of this quality become available for purchase. Shopping centres like these have historically been strong performers relative to other property types and this acquisition will help us balance our real estate portfolio across sectors.”
David Denison, president and chief executive
of CPPIB said: “The shopping centre acquisition
is consistent with our goal to diversify the
CPP reserve fund by investing in ‘real return’ assets such as high quality real estate. This
type of real estate is attractive because it
provides a stable and inflation-sensitive source
of income.”
Galeries de la Capitale, in Quebec City is a two-level enclosed shopping centre with 1.5m ft2 of lettable space. It features retail anchors in Sears, The Bay, Zellers, Famous Players and Simons.
Carrefour de L’Estrie, in Sherbrooke is also a two-level enclosed shopping centre with 1.2m ft2 of gross lettable space. Tenants include Sears, The Bay, Zellers, Rona and Metro.
CPPIB’s real estate portfolio - which is predominantly domestic - is now worth over $4bn.
CPP looks after the current and future retirement needs of 16m Canadians. It is based on a compulsory, defined benefit scheme set up in the mid 1990s, which will pay pensioners one quarter of the average industrial wage (currently $10,000 annually).

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