Canada Pension Plan tied tight to commercial real estate

Western Investor
September 11, 2014



 CPPIB recently took a $200 million stake in an Edmonton industrial development.

The Canadian Pension Plan Investment Board (CPPIB), which funds Canadian public pensions, is investing heavily into commercial real estate, which accounts for nearly one-fifth of assets in its $226.8 billion ultra-long term investment strategy.
CPPIB already holds interests in six downtown Vancouver office towers, mostly purchased four years ago, and the 530,000-square-foot Grandview Corners retail centre in Surrey, but most of its real estate holdings are in the U.S., Europe and Asia.
Recently, CPPI purchased a 45 per cent stake in the $560 million, 20-storey One Park Avenue office in New York City. In Canada, CPPIB spent $200 million for an 85 per cent stake in Henday Industrial Park, a 250-acre industrial development in Edmonton, by WAM Development Group and Walton Group.
In all, CPPIB now holds more than 112 million square feet of commercial real estate and real estate represents 18 per cent of total investments. Canadian real estate makes up 15.1 per cent of CPPIB property holdings, with the United States accounting for 35 per cent, according to Graeme Eadie, CPPIB’s senior managing director and head of global real estate investments. The remaining real estate is clustered in “emerging” markets in South America, Asia and Eastern Europe.
As for categories of real estate investment, Canada’s largest pension investment group holds 35.8 per cent of real estate assets in retail property, 27.2 per cent in office buildings, 11 per cent in industrial real estate, 8.8 per cent in development parcels, 9.7 per cent in private real estate debt, 5.5 per cent in mixed-use projects, and 2.4 per cent in multi-family buildings.

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