CPPIB enters Malaysian RE market

The Canadian pension plan has forayed into Southeast Asia with a joint venture partnership with a Malaysian developer.  

Canada Pension Plan Investment Board (CPPIB) has made its first direct real estate investment in Malaysia by forming a joint venture partnership with the Pavilion Group, a Malaysian property developer. CPPIB has invested MYR 485 million (€ 107 million; $118.6 million) in the partnership for a 49 percent stake.

 Through the partnership, the two firms would invest in a mixed-use development project in Kuala Lampur, Malaysia. Called the Pavilion Damansara Heights, the complex would house corporate towers, luxury residences and a retail arcade.

“We are pleased to make our first direct real estate investment in Southeast Asia through this joint venture with one of Malaysia’s most well-respected developers, the Pavilion Group,” said Jimmy Phua, managing director and head of real estate investments, Asia. “The joint venture fits well with our investment strategy as it provides us with a great opportunity to work with a smart partner in a high-quality real estate asset that will provide attractive risk-adjusted returns over the long term.”

On the proposed development project, Timothy Liew, project director of the Pavilion Group said: “It is a highly anticipated landmark for Damansara Heights, set within Malaysia’s most affluent neighborhood, offering a world class integrated development that is synonymous with the Pavilion Brand.”

In May this year, CPPIB also forayed into South Korea for its first real estate investment in the country. It formed a 50:50 joint venture partnership with the Singaporean sovereign wealth fund GIC to acquire a retail mall in Seoul for $263 million. The two firms will work towards repositioning the mall and rebranding it as a Hyundai department store.

The Canadian pension fund also made its first property investment in India via a joint venture partnership with the Shapoorji Pallonji group in June. The partners acquired an industrial park in the Southern Indian city of Chennai, in a deal that valued the property at $220 million. CPPIB actually had formed its partnership with Shapoorji Pallonji in late 2013, but did not execute the investment until this year.