The Canada Pension Plan Investment Board (CPPIB) is planning to invest $234 million in Chinese real estate in a new joint venture; and signals plans for further investments in that market.
The CPPIB Monday announced a joint venture with Longfor Properties Company Ltd. to finance a major development project in Suzhou, Jiangsu Province, China. The pension fund manager has committed RMB 1.25 billion ($234 million) to jointly develop the Times Paradise Walk project, which includes residential, office, retail and hotel space covering a total gross floor area of 735,000 square metres. The project is to be completed in multiple phases between 2016 and 2019.
“This is CPPIB’s first direct joint venture in a mixed-use development in China and we are pleased to be doing this alongside Longfor, a well-respected and experienced developer in China,” said Jimmy Phua, managing director, head of real estate investments Asia for CPPIB.
“We look forward to building a long-term strategic partnership with Longfor that will allow CPPIB to continue to invest in large scale mixed-use and retail projects in China, a market in which we see long-term growth potential,” Phua added.
Pinnacle Real Estate Capital Partners served as an independent advisor for the investment and will have an ongoing role with CPPIB and Longfor, the firms said. “This joint venture sets the stage for the beginning of a significant partnership between CPPIB and Longfor and they are ideal partners to capture the long term growth prospects for such large scale development projects in China,” said Kenny Tse, managing director for Pinnacle.