CPPIB RE investments grow $5bn in a year

The value of real estate assets at Canada’s largest public pension has risen to C$17.7bn from C$12.6bn in the year to June 30, showing the rapid pace with which it has been investing in the sector.

The Canada Pension Plan saw the value of its real estate portfolio mushroom by CS$5.1 billion ($5 billion; €4.1 billion) in the financial year to June 30, underlining the scale and fast pace of its global property investment programme.

According to first fiscal quarter numbers released on Friday by the Canada Pension Plan Investment Board (CPPIB) – the steward of the pension – its real estate was valued at C$17.7 billion (€14.5 billion; $17.85 billion) reflecting 10.7 percent of the value of its total assets . At 30 June last year, the value of CPPIB’s real estate was C$12.6bn billion, reflecting 8.2 percent of total assets.

CPPIB was actually quiet in terms of investing in real estate during the first quarter of its fiscal year. The pension plan’s exposure to the asset class nevertheless looks certain to grow significantly again over the full course of the year following several large transactions struck following the end of the quarter.

Last month the pension committed $355 million to seven multifamily assets in California, Illinois and Texas in joint ventures with US REITs Essex Property Trust, Multi-Employer Property Trust and ex-REIT AMLI Residential and C$1.04 billion in a JV with Sydney-based developer and fund manager Lend Lease and its fund, Australian Prime Property Fund Commercial, for two office towers in Sydney.

As reported previously by PERE, CPPIB also confirmed it is investing alongside another Sydney-based developer and fund manager, Goodman Group, as its plans to expand its logistics property operation stateside. Through the joint venture, CPPIB will invest $400 million in an $895 million partnership that will see Goodman also team up with logistics specialist California-based Birtcher Development and Investment for the development of and investment in sites in San Francisco, Los Angeles, Seattle, New York, New Jersey and Philadelphia.

CPPIB revealed its latest real estate valuation as it reported its overall net assets had grown to C$165.8 billion, up from C$161.6 billion at the end of the previous quarter.  The pension plan said it had recorded a 5-year annualised return of 2.1 percent for the quarter and a 10-year return of 6.3 percent from its assets.