Canadian pension fund manager Caisse de dépôt et placement du Québec is teaming up with a U.S. partner to buy a prestige real estate property in the heart of London's financial quarter.
The Caisse said on Monday that its real estate arm Ivanhoé Cambridge and U.S. private equity firm TPG are paying $400-million to acquire the Woolgate Exchange, a 351,000 square-foot, eight-storey office building in the City of London, close to the Bank of England.
The deal boosts Invahoe Cambridge's total investment in the London market to more than $650-million, Ivanhoe Cambridge said in a news release that characterizes the building as a "trophy asset."
"Woolgate Exchange is among the outstanding assets in the London market, whose value can be optimized with the combined expertise of TPC and our teams," Ivanhoe Cambridge chairman and chief executive officer Daniel Fournier said in the new release.
"Based on our strong European asset portfolio valued at more than $6-billion, which we are currently repositioning, and our knowledge of the London market, we are building a platform with the intention of opening an office in London."
Woolgate Exchange is 100 per cent leased to portfolio manager Portigon Financial Services AG, formerly known as West LB, a German bank that ran into financial difficulties in the 2008 global financial meltdown and was subsequently broken up.
The building's sale to the Caisse and TPG comes in the wake of a failed attempt last year to sell it to a Malaysian sovereign wealth fund.
Irish investment firm D2 Private bought Woolgate Exchange in 2006 but was unable to repay a loan it had secured against the property with Irish Bank Resolution Corp. Ltd. last year.
TPG stepped in, acquired the loan and then negotiated a transaction to buy the property with the help of Ivanhoe Cambridge.