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CPPIB buys eight malls Add to ...

The Canada Pension Plan Investment Board announced Monday it is taking full ownership of six shopping centres in British Columbia and Ontario, and a 90-per-cent interest in two malls in Quebec for a total investment of $335.5-million.

Among the deals is the $113.5-million purchase of the Hillside Centre in Victoria, B.C., from the Ontario Pension Board, the pension plan for Ontario public employees.

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The CPPIB has also paid $222-million to private real estate firm Osmington Inc. to increase its interest in a portfolio of seven other malls. It will hold a 100 per cent stake in five of them and a 90 per cent interest in two others.

The investment board made a total equity investment of $230.5-million and assumed $105-million in debt for a total purchase price of $335.5-million.

It wanted to seize the opportunity to invest in quality regional malls in prime markets, which seldom come on the market, said Peter Ballon, CPPIB's head of real estate investments for the Americas.

"These acquisitions expand our footprint in the Canadian retail sector, which is a strategic asset class within our real estate portfolio," he said in a release Monday.

"Hillside Centre represents our first investment in Victoria and increases our presence in British Columbia. With the portfolio of seven regional malls, we already have extensive knowledge of these assets through our existing majority ownership interests."

The CPPIB's real estate portfolio has an equity value of about $7.9-billion, with $3.6-billion in Canadian investments and the rest invested globally in the United Kingdom, the United States, Mexico, Brazil, continental Europe and the Asia-Pacific region.

CPPIB's Real Estate Investment group invests in commercial properties primarily through joint ventures with operating partners.

In April, it announced it had formed a joint venture with North America's largest operator of neighbourhood and community shopping centres, Kimco Realty Corp., to grow its portfolio of U.S. retail spaces.

The CPP Investment Board invests the funds not needed by the Canada Pension Plan, which has 17 million contributors and beneficiaries, to pay current benefits.

It invests in everything from public and private equities to real estate, infrastructure and fixed-income instruments.

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