CPPIB invests in Chinese rental market, Caisse in Spanish solar power

The Canada Pension Plan Investment Board is expanding its partnership with Longfor Group Holdings Ltd. to launch a new investment co-operation focused on rental housing programs in China.

The duo are targeting an initial investment of about $1 billion in two Chinese cities through developments, acquisition and master-lease of commercial assets that will be converted to rental housing.

“Demand for modern, quality rental housing among young professionals and new graduates in China is growing rapidly and through this collaboration, we are pleased to have the opportunity to participate in this fast-growing sector of Chinese real estate and to further diversify our investments in the market,” said Jimmy Phua, managing director and head of real estate investments in Asia at CPPIB, in a news release.

Read: CPPIB invests in two Chinese real estate developments

“We look forward to extending our partnership with a well-established and experienced operator like Longfor Group, particularly as we embark on our first dedicated rental housing investment in China.”

In January 2018, the CPPIB invested in two new mixed-use real estate projects in China as part of its partnership with Longfor Properties, which dates back to 2014.

“Our cooperation with CPPIB continues to go from strength to strength, following on from our successful investments in retail malls and mixed use sites in Suzhou, Chongqing, Chengdu and Shanghai,” said Zhao Yi, executive director and chief financial officer of Longfor Group.

“The strategic co-operation in long-term apartments shows CPPIB’s recognition of Longfor Group’s development and operation capabilities. With the precise positioning, brand reputation and efficient operation, we have made a strong start in the area of long-term rental apartments and expect to gain a strong foothold in this new, policy-supporting market. We are very pleased to share this great opportunity with our long-term partners.”

Read: CPPIB to purchase Ontario-based renewable energy projects

In other investment news, the Caisse de dépôt et placement du Québec is providing $150 million in financing to help ContourGlobal acquire a portfolio of  five concentrated solar power assets in the southwest of Spain.

“We are pleased to contribute to the global clean energy transition by helping companies like ContourGlobal increase their presence in the renewable energy sector,” said Marc Cormier, executive vice-president of fixed income at the Caisse. “ContourGlobal’s acquisition added 250MW of solar energy to its portfolio, more than tripling its solar capacity.”

Read: Caisse invests $50M in Canadian construction company