The Canada Pension Plan Investment Board (CPPIB) has signed a deal to jointly own a shopping centre in Sweden, marking the Canadian pension fund’s first real estate investment in the Nordic region.
According to the steward of the $172.4 billion Canada Pension Plan, it will co-own the Kista Galleria Shopping Centre in Stockholm with Citycon Oyj, a Finland-based owner and operator of shopping centres in the Nordic and Baltic countries, on a 50:50 basis. DNB Livsforsikring ASA, Norway’s largest bank, is selling the asset. Citycon will be responsible for the asset management of the shopping centre.
The transaction is based on a property value of approximately SEK4.6 billion (€537.6 million, $712.3 million) making CPPIB’s equity investment approximately SEK1.18 billion. The transaction is expected to close this month.
Graeme Eadie, senior vice-president of real estate investments at CPPIB, said in a statement that this deal could reflect the start of a longer term venture with Citycon “on future investment opportunities in the region” as it continues to expand CPPIB’s retail portfolio in Europe.
Nils Styf, Citycon’s chief investment officer added: “Both parties consider Kista Galleria to be the first step in an on-going joint investment platform.”
Kista Galleria features 185 shops and restaurants as well as a cinema, bowling, indoor go-carting and other leisure activities. The property has a gross leasable area of more than 969,000 square feet and includes a hotel, student housing, healthcare premises and municipal services. The shopping centre underwent a complete renovation and large extension in 2002 and was further expanded in 2009.
At 30 September 2012, CPPIB’s real estate portfolio totalled $18 billion. It includes ownership interests in shopping centres in Canada, Australia, Brazil, China, Germany, Turkey, the US and UK.