In 2008, mention the words “real estate” to Canada’s Caisse de dépôt et placement du Québec and you likely would receive a frown. That year, the pension plan lost 25 percent, or C$39.8 billion (€24.8 billion; $32.2 billion), of its value after reporting significant losses. To be fair, it wasn’t just real estate to blame, although it did report that its property portfolio recorded losses of 21.9 percent.
Since those dark days, however, it seems Caisse de dépôt et placement du Québec has turned from being a distressed investor into a buyer of distressed assets. Last month, its real estate subsidiary, Ivanhoé Cambridge, revealed that it had teamed up with private equity firm TPG Capital to buy the 351,000-square-foot Woolgate Exchange for £265 million (€310 million; $417 million). TPG originally sourced the transaction last year when it agreed to buy a junior loan backed by the building from the Irish Banking Resolution Corporation, formerly known as Anglo Irish Bank. TPG then worked with senior and junior creditors, with the purchase price partially repaying the junior loan and fully repaying the senior bondholders.
Having made £400 million of property acquisitions in London in the past 12 months, it is clear that Caisse de dépôt et placement du Québec wants more exposure to the city. Indeed, it is “repositioning” its C$6 billion European real estate portfolio towards the UK, as well as Paris.
Ivanhoé Cambridge has been operating in Europe for more than 15 years through different affiliates. “Now that we have merged those entities, the time is right to create more coherence in our ownership and give more strength to our portfolio and our local capacity to manage it,” Bill Tresham, president of global investments, told PERE. “That is why we are seeking to reposition our portfolio in the office sector to the two largest cities in Europe – Paris and London – and strategically sell our mature office assets in Germany, France and the UK. We already have a team based in Paris and, in the coming months, we will add members of our team in London.”