In November 2016, the Canada Pension Plan Investment Board (CPPIB) paid $162 million to Malaysian property group Pavilion for a 40% stake in a retail mall in the northeastern Chinese city of Dalian.
The deal capped an important couple of weeks in the region for the Canadian pension fund, which at the time had $214 billion (C$287 billion) of assets under management.
On October 24, CPPIB paid $375 million for a 25% stake in Raffles City China Investment Partners III, a private vehicle managed by Singapore’s CapitaLand. This deal was preceded by the fund’s investment of $144 million in a 49% stake in a shopping mall joint venture with Chongqing-based Longfor Properties just four days earlier.
The three property acquisitions reflected CPPIB's “long-term commitment to China”, the fund's managing director and head of real estate for Asia, Jimmy Phua, told AsianInvestor at the time.
“We will continue to pursue attractive investment opportunities both in China and other parts of Asia,” Phua said, without offering further details.
With the trio of deals complete in China, CPPIB’s total real estate exposure in Asia-Pacific – including China, Japan, South Korea and Australia – was worth around $7 billion by the end of 2016.
As of June 2022, CPPIB’s total assets under management stood at $389 billion. Alongside an increase in total assets, the Canadian fund's overall exposure to Asia increased to $92.2 billion, up from $32 billion in 2016.
CPPIB’s annual report does not provide a geographical breakdown of its exposure to real estate assets, but a look at its total real estate holdings at the end of fiscal 2022 shows that it currently has significant allocations throughout Asia-Pacific in countries including Australia, China, India, South Korea, New Zealand and Singapore.
As events suggested in 2016, the fund has remained active in China, with two major real estate highlights mentioned in its Q1 fiscal 2023 report.
In June, CPPIB committed $300 million to Hillhouse Capital Group’s inaugural real estate fund, the Hillhouse Real Asset Opportunities Fund. The capital commitment brought the vehicle to a final close of more than $2 billion in equity, which will be used to invest in new-economy real estate in China, with a focus on life sciences, data centres and logistics.
CPPIB has also agreed to sell six logistics warehouses in western China through the Goodman China Logistics Partnership (GCLP). The net proceeds from the sale are reported to be approximately $238 million.
The GCLP was established by CPPIB and Goodman Group in 2009, with the aim of owning and developing logistics assets in mainland China, and CPPIB currently has an 80% ownership interest in it.