CPPIB venture buys stake in UK mall for £307m

The Toronto-based pension plan has teamed up with London-based Hammerson to acquire a 33.3 percent stake in the Bullring Shopping Centre, a 1.2 million-square-foot mall in Birmingham.

The Canada Pension Plan Investment Board (CPPIB) has formed a 50:50 joint venture with Hammerson to acquire a 33.3 percent stake in Bullring Shopping Centre for £307 million (€364.82 million; $476.87 million). The venture between the Toronto-based pension plan and the London-based retail real estate investment trust bought their stake from Australia’s Future Fund, which initially bought its share in the 1.18 million-square-foot mall in 2009.

The ownership of Bullring is now held 50 percent by Hammerson (its new 16.7 percent stake is in addition to its existing 33.3 percent share), 16.7 percent by CPPIB and 33.3 percent by the Henderson Shopping Centre Fund. CPPIB also has a small indirect interest in Bullring through its investment in the Henderson Shopping Centre Fund.

“This transaction provides CPPIB with further scale and opportunity in Bullring and is in line with our UK retail strategy of investing in high-quality assets in major locations with strong growth potential,” said Graeme Eadie, head of real estate investments at CPPIB. “We are pleased to expand our relationship with Hammerson, whom we know well having worked together successfully on other investments.”

Hammerson originally developed Bullring in 2003 as part of a joint venture with Henderson and Land Securities and has managed the mall since its opening. Hammerson will continue to be responsible for managing and developing the asset.

David Atkins, chief executive officer of Hammerson said: “This is an excellent opportunity to enhance our position in one of the UK’s strongest shopping destinations at an attractive entry price.” 

Located in Birmingham, Bullring is more than 99 percent leased to 167 tenants, including anchors Selfridges and Debenhams, Apple and The Gap. Bullring attracts approximately 40 million shoppers per year.