The Canada Pension Plan Investment Board (CPPIB) has set up a joint venture to develop a 1.5 million-square-foot scheme in Leeds alongside UK real estate investment firm Hermes Real Estate. The new venture follows a London partnership set up in 2013 between the same two parties.
This new deal sees Hermes selling a 50 percent stake in the development phase of Wellington Place in Leeds, which is a northern UK city. The 50:50 partnership involves Canada's CPPIB and Hermes, which is the property investment and fund management arm of the BT Pension Scheme, injecting equity for a total development value in excess of £185 million (€232 million; $289 million), the two firms noted.
Chris Taylor, chief executive of Hermes Real Estate, said: “Our partnership with CPPIB in London has grown significantly since its establishment in July 2013, and it is a natural next step for both parties to develop the partnership further.”
In an arrangement similar to other development partnerships struck up between foreign capital and domestic players, Wellington Place is being developed and managed by a separate property company. In this case, MEPC will continue to manage the development comprising 1.5 million square feet of commercial, retail, leisure and residential space, which will make Wellington Place one of the biggest new city center business quarters in Europe.
Andrea Orlandi, managing director and head of real estate investments in Europe for CPPIB, said the development in Leeds was a “strong complement” to its existing office portfolio in London.