CPPIB forms JV with Europe’s largest retail REIT

Canada’s biggest pension plan has agreed to form a new joint venture focused on German retail real estate, in conjunction with a €394 million platform investment.

Canada Pension Plan Investment Board has established a new partnership with Unibail-Rodamco, the largest retail real estate investment trust in Europe and second-largest in the world, to expand its German retail property platform. The joint venture will be formed through CPPIB’s indirect acquisition of a 46.1 percent stake in Unibail-Rodamco’s German retail platform, mfi management fur immobilien AG for €394 million. In addition to the purchase, which is slated to close in the third quarter, the C$238.8 billion ($173.5 billion; $198.7 billion) pension plan also will invest a further €366 million to support mfi’s financing strategies.

“As a long-term investor, this transaction provides us with the unique opportunity to achieve immediate scale in the retail sector in Europe's largest economy,” said Andrea Orlandi, CPPIB’s head of real estate investments in Europe, in a statement. 

mfi owns seven existing shopping centers in key German cities such as Munich, Berlin and Leipzig, as well as one additional asset under development in Osnabruck. As the second-largest property and asset manager in Germany, it also provides third-party asset management services to 18 other retail properties across the country. 

Unibail-Rodamco already has an existing partnership with CPPIB, as both parties own stakes in CentrO Oberhausen, one of Germany’s largest and most successful shopping centers. The German REIT bought its undisclosed interest in the property from Stadium Group, the original developer of the asset, in May 2014. Unibail-Rodamco subsequently formed its joint venture with CPPIB, which purchased a 50 percent interest in CentrO from Stadium for €270 million in May 2011.