The Canada Pension Plan Investment Board is partnering with a European real-estate firm to buy a long leasehold on an eight-floor office building in London in a deal worth about $295.9-million.
The CPPIB would own 70 per cent of the joint venture, representing a £128-million ($206.9-million) investment, and the rest would be owned by Hammerson, which will commit £55-million.
The building at 10 Gresham St. covers 260,000 square feet and was completed in 2003. Its principal tenant is Lloyds TSB Bank.
"We are delighted to be working once again with Hammerson to buy this highly attractive office investment in the city of London," Graeme Eadie, CPPIB's senior vice-president of real estate, said in a release.
Hammerson owns six London office buildings and has investments in 16 major shopping centres and 16 retail parks.
Hammerson chief executive officer David Atkins said the acquisition fits with its plans to make agreements in the London office market.
"Given the existing lease profile and relatively low rental base this offers an excellent opportunity for us to increase value by using our asset management skills," he said.
The CPPIB 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's designed to build up a pool of investments that can generate enough money to take up the slack as contributions from employers and employees fall.