CPPIB makes Nordics debut with Swedish mall stake

The steward of the $172.4 billion Canada Pension Plan will jointly own the Kista Galleria Shopping Centre in Stockholm in its first real estate investment in the Nordic region.

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.