The Canada Pension Plan Investment Board has formed a joint venture with North America's largest operator of neighbourhood and community shopping centres, the board and Kimco Realty Corp. said Wednesday.
An initial investment of $370-million will include five former PL Retail properties in several states that Kimco acquired in the fourth quarter of 2009.
"These properties are located in well-established neighbourhoods and anchored by national retailers including Costco and Wal-Mart stores," they said in a news release.
The investment board will acquire a 45-per-cent interest in the venture and Kimco will retain a 55-per-cent interest.
It will also act as operating partner, managing the properties and earning asset management and other customary fees.
The board and Kimco said they intend to grow their joint venture over time through the acquisition of additional retail properties or portfolios.
"We are very excited about forming a long-term partnership with one of the largest and most well regarded pension funds in Canada," said Kimco president and chief executive officer David Henry. "CPPIB has an outstanding track record and wonderful staff of real estate professionals."
Peter Ballon, CPPIB vice-president and head of Real Estate Investments - Americas, described the venture as a "key opportunity for CPPIB to acquire a portfolio of high quality assets and invest alongside one of the largest and most experienced retail shopping centre operators in the U.S."
"We look forward to growing this relationship through strategic acquisitions as we continue to expand our U.S. retail investment program," Mr. Ballon said.
Kimco, a real estate investment trust, owns and operates what it describes as North America's largest portfolio of neighbourhood and community shopping centres with interests in 1,478 retail properties comprising 152 million square feet of leasable space across 45 states, Puerto Rico, Canada, Mexico and South America.
The CPPIB is a professional investment management organization that invests the funds not needed by the CPP to pay current benefits on behalf of 17 million Canadian contributors and beneficiaries. It invests in everything from public and private equities to real estate, infrastructure and fixed-income instruments.
CPPIB's Real Estate Investment group invests in commercial properties primarily through joint ventures with operating partners. The group's $7.1-billion global real estate portfolio contains mostly office and retail properties located in major centres across Canada, the United Kingdom, the United States, Mexico, Brazil, continental Europe and the Asia-Pacific region.