Two of Canada's largest pension plans are teaming up to build a 30-storey office tower in downtown Toronto that will become the new national headquarters for Royal Bank of Canada .
The development, to be called RBC WaterPark Place, is a 50-50 joint venture between the Canada Pension Plan Investment Board and Oxford Properties Group, the real estate arm of OMERS, the Ontario Municipal Employees Retirement System.
It is being built on the north side of Queens Quay between Bay and York Streets, with construction slated to begin later this year RBC will make WaterPark Place the new national headquarters for its Canadian Banking business and occupy more than half of the 930,000-square-foot property.
More than 4,000 RBC employees are expected to move into the new space beginning in the third quarter of 2014.
"Oxford is excited to develop this exceptional piece of real estate, and to bring this world class office project to Toronto's vibrant waterfront community," said Oxford president and CEO Blake Hutcheson.
"We are also very proud to build upon Oxford's 50-year relationship with RBC," he said, adding that the signing of a pre-lease for 60 per cent of the development was "a testament to both the quality of the project and the strength of the relationship."
Oxford will oversee all aspects of the development and management of the property.
Peter Ballon, CPPIB's head of real estate investments, Americas, said the development "provides us with the opportunity to add a major state-of-the-art office tower to our Canadian real estate portfolio with a premier tenant in place."
Dave McKay, group head, Canadian banking for RBC, said the move underlines the bank's strong commitment to the growth and development of the city of Toronto, the downtown core, as well as to our clients, employees and the communities we serve."
RBC will occupy approximately 550,000 square feet of RBC WaterPark Place, which will have more than 50,000 square feet of retail services and amenities on the lower floors.
Oxford and CPPIB co-own a portfolio of office properties across Canada valued at approximately $3-billion, and are currently also developing 1021 West Hastings in Vancouver.
Oxford, the real estate arm of the OMERS Worldwide Group of Companies, with over 1,300 employees and approximately $17-billion of real assets that it manages for itself and on behalf of its co-owners and investment partners.
The CPPI is a professional investment management organization that invests the funds not needed by the Canada Pension Plan to pay current benefits on behalf of 17 million Canadian contributors and beneficiaries. It invests in public equities, private equities, real estate, inflation-linked bonds, infrastructure and fixed income instruments. As of June 30, the CPP Fund totalled $153.2-billion.
OMERS has more than $53-billion in net assets invested on behalf of more than 400,000 members.