The Canada Pension Plan Investment Board is wrapping up a busy year of buying up assets Down Under with a $1.11-billion (Australian) play for a stake in an Australian property development fund.
The CPPIB - which invests surplus contributions from millions of employees and their employers to the Canada Pension Plan - along with three international partners, has made a revised bid to buy ING Industrial Fund, which has a portfolio of 57 industrial properties in Australia and Europe.
A majority of the properties are in prime industrial areas in Sydney, Melbourne and Brisbane.
The Australian property development fund is valued at $2.6-billion, comprising $1.4-billion in equity and $1.2-billion in debt. The upwardly revised all-cash offer will be recommended by the fund's board to unitholders, the CPPIB said.
CPPIB would hold approximately a 42 per cent stake, representing an equity investment of $600-million and $510-million in debt.
The Canadian pension fund manager has been buying up infrastructure and real estate assets in Australia this year, investing more than $4-billion in the country this year.
Graeme Eadie, CPPIB's senior vice-president of real estate investments, said the Canadian pension fund has been investing in Australia for about three years now, but the number of acquisitions made there this year is unusually high.
"(Australia) is relatively strong, it didn't go through the weakness that many other markets did and it's coming back as it moves forward," said Mr. Eadie.
"And it turns out there's been a number of interesting opportunities of size that have come forward."
The four-party consortium proposing to buy the ING Industrial Fund is led by Australian property firm Goodman Group and includes CPPIB, China Investment Corp. and Dutch pension fund Alegemene Pension Groep.
The CPPIB partnered with Goodman in Australia earlier this year, taking an 80 per cent interest in a real estate joint venture called the Goodman Australia Development Fund. The CPPIB invested $200-million in the fund.
Other investments in Australia this year include $375-million in Australian shopping centres managed by Colonial First State Global Asset Management in August.
The fund also bought Intoll Group, which owns a 30 per cent stake in Ontario's express toll Highway 407 for $3.2-billion takeover by CPPIB with 95 per cent of votes cast at a meeting favouring the deal.