Deals

CPPIB enters New Zealand market

The pension system bought a stake in a 13-building portfolio from another Canadian pension plan.

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The Canadian Pension Plan Investment Board (CPPIB) has made its New Zealand debut with the acquisition of a stake in a 13-building portfolio, the pension system said Monday.

Toronto-based CPPIB bought the 50 percent interest from Ottawa, Ontario-based Public Sector Pension Investment Board (PSP). CPPIB’s equity investment was C$216 million ($164.4 million, €155 million) and the stake was valued at C$545 million, according to Monday’s statement. The 2.9 million square foot portfolio comprises office and shopping center properties located primarily in Auckland and Wellington.

“This is a rare opportunity to acquire a diversified portfolio that includes top-tier office and retail properties in New Zealand, a market with continuing population and tourism growth,” Jimmy Phua, CPPIB’s head of Asia real estate investments, said in Monday’s statement. “With this acquisition, we are able to gain a meaningful presence in the New Zealand commercial real estate market, partnering alongside PSP Investments, who is a like-minded, long-term partner and extending our relationship with AMP Capital.”

PSP, which bought the portfolio in November 2014, will retain a 50 percent stake, and AMP Capital, a Sydney-based investment manager, will continue to operate the portfolio.

“We welcome CPPIB as investor in this core portfolio of high quality office and retail properties across New Zealand,” Neil Cunningham, PSP's global head of real estate investments, said in Monday's statement. “CPPIB shares our long-term investment horizon and we look forward to collaborating with CPPIB and AMP to continue supporting the development and growth of the portfolio.”

CPPIB managed $300.5 billion as of September 30. It also had a 6.3 percent net return in the first half of the year, according to its second quarter investment report. The pension system held $38.4 billion of real estate investments as of September 30.

PSP oversaw $116.8 billion as of March 31 and had a 1 percent return in the 2016 fiscal year, according to its most recent investment report. It managed $20.4 billion in real estate as of March 31.