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Some of the buildings of Sydney skyline are lighted up in pink as part of the Vivid Festival in Sydney May 24, 2012.Daniel Munoz/Reuters

The Canada Pension Plan Investment Board has closed a large real estate deal in Australia and says it has already sold four of the properties it acquired, raising funds to reduce its required equity investment in the portfolio.

CPPIB has partnered with Dexus Property Group to buy an Australian property portfolio controlled by the Commonwealth Bank of Australia for about $3.7-billion (Australian) or about $3.8-billion (Canadian). The giant pension fund, which manages the assets of the Canada Pension Plan, said its 50-per-cent equity investment in the deal was $1.9-billion.

But the partners said Tuesday they have already agreed to sell four assets from the property portfolio for $701-million (Canadian). The proceeds will reduce CPPIB's equity commitment to $1.55-billion

The purchase was announced in December but required approval from unitholders of the Commonwealth Property Office Fund, which was listed as a real estate investment trust on the Australian Securities Exchange. CPPIB said it received acceptances from unitholders representing 94.8 per cent of the fund's units, which was a sufficient threshold to allow the purchasers to force the acquisition of the remaining units.

After the sale of the four properties, the remaining portfolio includes 21 office properties located in major commercial centres across Australia. The properties will be managed by Dexus, which is one of Australia's largest commercial property management firms.

Australian office property has been a favoured investment for CPPIB, which already had $5.8-billion invested in Australia even before the latest deal. That included a $1-billion investment last year in a new office tower project being developed in Sydney, known as the Barangaroo South project.

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