Ivanhoe Cambridge, one of Canada’s largest property investors, doubled its investment in Chinese real estate to $1 billion by taking a stake in a firm that builds retail-anchored mixed-use developments in the Shanghai area.
Ivanhoe, the real estate arm of Caisse de Depot et Placement du Quebec, Canada’s second-largest pension-fund manager, is investing as much as $500 million in Shanghai-based Chongbang. It’s part of $920 million in fundraising by Chongbang that also includes capital from APG Asset Management NV, a Dutch pension-fund manager, Ivanhoe said in a statement Monday.
“Why Shanghai? It’s the economic engine of China,” Rita-Rose Gagne, executive vice president of growth markets at Montreal-based Ivanhoe, said in a telephone interview. “The trend that we like is the urbanization trend and the growing income that you see with that. Because of that trend, there is a demand in a very dense city like Shanghai to get places where people can live, play, work, shop.”
The investment is Ivanhoe’s largest in China and follows one in the La Nova shopping center in Changsha with partner Bailian Group. The asset manager is expanding in Shanghai -- the country’s most populous city, with 24 million people -- to capitalize on a growing middle class.
Chongbang builds large-scale complexes with a mix of office, retail, residential and entertainment components. Its projects include the Life Hub at Daning, home to a 40,000-square-meter (431,000-square-foot) office tower that was sold to Citigroup Inc. and a 110,000-square-meter shopping mall.
Ivanhoe Cambridge manages about C$42 billion ($34 billion) of real estate around the world. Caisse de Depot manages $225.9 billion of assets for retirees in the province of Quebec.