* Announces acquisition of 50 pct stake in two buildings
* Total equity investment of C$115 million before closing
* Brings Vancouver office portfolio to six buildings
By Pav Jordan
TORONTO, March 20 The Canada Pension Plan
Investment Board (CPPIB), which has been aggressively building
its real estate portfolio, announced a further investment on
Tuesday in the prime office market in Vancouver, Canada's most
expensive property market.
The CPPIB, which invests on behalf of 18 million Canadians,
said it has bought a 50 percent stake in two downtown Vancouver
office properties that are worth C$230 million ($232.83
million). The CPPIB's equity investment, before closing costs,
adjustments and working capital, is C$115 million.
The other half is owned by Oxford Properties, the real
estate investing arm of OMERS, the Ontario Municipal Employees
Retirement System, another major Canadian pension fund and the
CPPIB's largest real estate partner.
"The downtown Vancouver office market is very attractive for
long-term investors such as CPPIB," Peter Ballon, the fund's
vice-president and head of real estate investments, said in a
Vancouver has been identified by the CPPIB as one of three
target Canadian markets for office properties and the
acquisitions on Tuesday mean it will own stakes six buildings in
a market where quality assets rarely exchange hands. Its other
target cities in Canada are Toronto and Calgary.
"Calgary happens to be a very attractive market but it also
a very hot market right now and we haven't been as active in
that market as we have been in Toronto," Ballon told Reuters in
CPPIB is still on the hunt for real estate acquisitions. It
is mostly interested in emerging powerhouses such as Brazil and
China, but it also has its eye on more established centers.
Ballon, who is in charge of real estate investments for
North and South America, said the CPPIB preferred different
sectors in different geographies, almost always favoring
The CPPIB has been especially aggressive in real estate
since the global economic crisis of 2008-09, first in the
hard-hit office sector and then the retail sector.
"Now we're working sort of on the next evolution in terms of
where the opportunities are," Ballon said. "We are very bullish
on the U.S. recovery."
The CPPIB, which has investing horizons going out as far as
75 years, had a C$14.4 billion real estate portfolio as of Dec.
31, equal to 9.5 percent of its assets.