The Canadian Pension Plan Investment Board is entering a co-investment partnership with the Government of Singapore Investment Corp. and Boston Properties Inc. to acquire $1 billion in office properties.
The CPPIB and Boston Properties will each invest $250 million in the venture, which will target offices in Boston, Los Angeles, New York, San Francisco, Seattle and Washington. The remaining $500 million will be invested by the GISIC.
Under the terms of the agreement, which will last two years, Boston Properties will offer the CPPIB and the GISIC with the first right of refusal to enter joint ventures with the U.S. property development firm on acquisition opportunities that meet the target investment criteria. While the exact details of the criteria are unknown, it does exclude ground-up development projects, according to a press release. The CPPIB and the GISIC won’t be involved in the management or leasing of acquired properties.
In the release, Peter Ballon, managing director and global head of real estate for the CPPIB, said the organization believes there’s an appetite for high-quality office environments able to attract and retain talent. “By expanding our relationships with both Boston Properties and the GISIC in this new program, we will be strongly positioned to serve this ongoing market need and, in turn, generate returns for our fund contributors and beneficiaries.”
The CPPIB is also investing $400 million in a joint venture to build data centres in Japan with a Japanese trading and investment company. The CPPIB’s partner organization, Mitsui and Co. Ltd., intends for these large scale data centres to be build in the greater Tokyo and Osaka areas.
In a press release, Jimmy Phua, managing director and head of real estate in the Asia Pacific for the CPPIB, noted this growth has been accelerated by changes in people’s digital behaviour resulting from the coronavirus pandemic. “This investment will help address both the significant demand and constrained supply, providing tenants with high-quality space and service.”