The Canada Pension Plan (CPP) is launching a new strategic joint venture to bolster its exposure to shopping mall real estate in Germany.
A wholly-owned subsidiary of the Canada Pension Plan Investment Board (CPPIB) is forming a new strategic joint venture with Paris-based commercial property firm, Unibail-Rodamco, in order to grow its investment in German retail real estate. The two firms are already joint venture partners in another German shopping mall.
This latest joint venture will be created by the CPPIB making an indirect acquisition of a 46.1% interest in Unibail-Rodamco’s German retail platform, mfi management für immobilien AG (mfi), for €394 million. The CPPIB also intends to invest another €366 million to support mfi’s financing strategies. The transaction is subject to customary closing conditions, including regulatory approvals, and is expected to close in the third quarter.
“This agreement allows CPPIB to build on our existing relationship with Unibail-Rodamco, Europe’s premier shopping centre operator, through this new joint venture in Germany,” said Andrea Orlandi, CPPIB’s managing director and head of real estate investments in Europe. “As a long-term investor, this transaction provides us with the unique opportunity to achieve immediate scale in the retail sector in Europe’s largest economy.”
Mfi’s portfolio consists of seven existing shopping centres located in Germany and one property that is currently under development. It also provides third-party asset management services for another 18 shopping centres across Germany.
“We are delighted to further extend the partnership between Unibail-Rodamco and CPPIB in Germany which started in 2014 when Unibail-Rodamco acquired a stake in CentrO [shopping centre],” said Christophe Cuvillier, CEO and Chairman of Unibail-Rodamco. “This decision aligns the interests of Unibail-Rodamco and CPPIB and allows the CentrO team to contribute meaningfully to the further growth of mfi.”