Source: The Canadian Press

The Canada Pension Plan Investment Board is wrapping up a busy year of buying up assets Down Under with a A$1.11-billion play for a stake in an Australian property development fund.

The CPPIB — which invests surplus contributions from millions of employees and their employers to the Canada Pension Plan — along with three international partners, has made a revised bid to buy ING Industrial Fund, which has a portfolio of 57 industrial properties in Australia and Europe.

A majority of the properties are in prime industrial areas in Sydney, Melbourne and Brisbane.

The Australian property development fund is valued at A$2.6 billion (C$2.63 billion), comprised of A$1.4 billion in equity and A$1.2 billion in debt. The upwardly revised all-cash offer will be recommended by the fund’s board to unitholders, the CPPIB said.

CPPIB would hold approximately a 42% stake, representing an equity investment of A$600 million and $510 million in debt.

The Canadian pension fund manager has been buying up infrastructure and real estate assets in Australia this year, investing more than A$4 billion in the country this year.

Graeme Eadie, CPPIB’s senior vice-president of real estate investments, said the Canadian pension fund has been investing in Australia for about three years now, but the number of acquisitions made there this year is unusually high.

“(Australia) is relatively strong, it didn’t go through the weakness that many other markets did and it’s coming back as it moves forward,” said Graeme Eadie, CPPIB’s senior vice-president of real estate investments.

“And it turns out there’s been a number of interesting opportunities of size that have come forward.”

The four-party consortium proposing to buy the ING Industrial Fund is led by Australian property firm Goodman Group and includes CPPIB, China Investment Corp. and Dutch pension fund Alegemene Pension Groep.

The CPPIB partnered with Goodman in Australia earlier this year, taking an 80% interest in a real estate joint venture called the Goodman Australia Development Fund. The CPPIB invested A$200 million in the fund.

Other investments in Australia this year include A$375 million in Australian shopping centres managed by Colonial First State Global Asset Management in August.

The fund also bought Intoll Group, which owns a 30% stake in Ontario’s express toll Highway 407 for A$3.2-billion in a deal that closed earlier this month.

The CPPIB invests money not required to pay benefits under the Canada Pension Plan. As of the end of September it had $138.6 billion in assets, up from $123.8 billion in assets a year ago.

Among its widespread investments, the pension fund manager has been buying up infrastructure and real estate assets around the world. It likes those investments because they have a predictable cash flow, offer inflation protection and are easy to maintain.

CPPIB isn’t the only Canadian investor making major plays for Australian assets.

Earlier this month, fertilizer and farm input giant Agrium Inc. (TSX:AGU) completed a $1.16-billion bid for Australia’s AWB Ltd., a grain marketer.

Agrium won’t be the first Canadian agribusiness in Australia. Last year Canada’s biggest grain handler, Viterra Inc. (TSX:VT), bought ABB Grain for $1.4 billion.

Toronto-based Brookfield Infrastructure Partners has submitted an offer for the 60% of Sydney-based Prime Infrastructure that it doesn’t already own, a transaction that values the Australian company at US$1.4-billion.