The Canada Pension Plan Investment Board agreed to pay $1.8 billion for a stake in 10 U.S. shopping malls and two redevelopment sites owned by Westfield Group as part of a joint venture with the Australian landlord.
The Toronto-based retirement plan will own a 45 percent share of the real estate, it said today in a statement. Most of the malls are in California, including Westfield Horton Plaza in San Diego and Westfield Culver City.
“This is an excellent opportunity to acquire a significant interest in a portfolio comprising high-quality regional shopping centers that are well-positioned for long-term growth,” Graeme Eadie, senior vice president for real estate investments at the pension plan, said in the statement. “This acquisition represents our largest real estate investment to date globally and supports our retail real estate strategy of investing in dominant regional malls with best-in-class operators.”
The deal, expected to be completed this quarter, will give Canada Pension stakes in 26 malls in major U.S. markets. Increased leasing in the fourth quarter boosted the average occupancy at properties owned by mall real estate investment trusts to 91.9 percent, according to Mark Biffert, an analyst for Bloomberg Industries. Net operating income rose 3 percent.
Westfield, the world’s biggest mall operator, has been selling stakes in its properties as it seeks global partners, Peter Lowy, the Sydney-based company’s co-chief executive officer, said in the statement. Westfield will remain the manager and leasing agent for the malls in the joint venture.
Canada Pension Plan Investment Board, the country’s second-biggest retirement fund, has stakes in shopping malls in Australia, Brazil, Germany, the U.K. and the U.S. The fund had C$152.8 billion ($152.95 billion) of assets as of Dec. 31, according to Feb. 10 quarterly financial statements.