UPDATE 1-Canada's CPPIB to buy stake in Brazil's Aliansce for $480 mln

Mon Jul 29, 2013 7:04pm EDT

TORONTO, July 29 (Reuters) - The Canada Pension Plan Investment Board, one of the world's biggest pension funds, said on Monday it has agreed to acquire a 27.6 percent stake in Brazil's Aliansce Shopping Centers SA from General Growth Properties for an equity amount of $480 million.

Rio de Janeiro-based Aliansce, one of Brazil's top publicly traded real estate operating companies, is focused exclusively on owning, managing and developing enclosed shopping centers.

"Our largest portfolios by far (in Brazil) have been in the industrial sector and we have been actively looking to grow in the retail sector there. This deal addresses that desire," said Peter Balloon, CPPIB's head of real estate investments in the Americas.

Balloon said CPPIB has agreed to buy the stake at a premium to Aliansce's current trading price, but he declined to provide any specifics on the size of the premium being paid.

Aliansce, which was formed in 2004, owns or manages a retail portfolio of assets located in key areas of Brazil, including São Paulo, Rio de Janeiro, Salvador, Belem and Belo Horizonte.

CPPIB already owns a real estate portfolio in Brazil, which was valued at more than C$900 million ($877.11 million) prior to this deal.

"This transaction represents a significant expansion of CPPIB's real estate portfolio in Brazil, which remains a strategic market for us over the long term," said Balloon.

The deal with General Growth is expected to close in the fall of this year.

General Growth, in a separate release on Monday, outlined results that topped Wall Street expectations. The company also said it had reached a side deal to sell a smaller portion of its remaining interest in Aliansce to Brazil's Rique Empreendimentos e Participacoes Ltda.