Canadian real estate giant Ivanhoé Cambridge is making its first investment in Australia with a modest deal that gets its toes wet in one of the world's rising commercial property markets.
Ivanhoé, the property unit of pension fund Caisse de dépôt et placement du Québec, is partnering with U.S. private equity player Blackstone on a $240-million (Australian) purchase for a 25-per-cent stake in Sydney's ANZ Bank Centre. The 42-storey landmark office tower is also known as Liberty Place.
Ivanhoé is looking for top-grade real estate in 15 of the world's largest cities as it concludes a revamp of its asset portfolio to focus on office buildings, shopping centres and multiresidential complexes and away from hotels and secondary markets. The company last year bought $5.1-billion of property while selling $8.6-billion in assets. Returns on its real estate investments over the past four years have averaged 12 per cent.
Three-quarters of Ivanhoé's global office building portfolio was located in Canada and the United States at the end of 2013. The property company says it will explore the possibility of hiking its investments in Australia and in other parts of the Asia Pacific region this year.
Ivanhoé and Blackstone are buying their stake from LaSalle Investment Management on a yield of about 5.6 per cent, according to the Australian Business Review. It is the first major office tower deal in Sydney to be struck this year without a development angle, the publication said.
Competition for holding was said to be heated.
"There's lots of liquidity in our sector these days, everywhere in the world, and lots of competition," Ivanhoé chief executive officer Daniel Fournier said at Caisse's annual results news conference in February. "We're not the only ones who can cut a big cheque and wrap things up very quickly."