Canada’s Largest Pension Fund Launches Real Estate JVs in U.S., India

The C$550.4 billion ($432.6 billion) Canada Pension Plan Investment Board has launched a $979 million joint venture with real estate developer LMC to build multifamily residential communities in the U.S.

The two will focus on urban and suburban communities in major U.S. markets that have strong population and job growth, starting with Boston, Miami and Denver. There will be a total of 1,371 apartment homes built among three developments in Denver, and one each in Boston and Miami. They said they are targeting high-growth markets where the housing supply hasn’t kept pace with renter demand.

“This investment is an excellent opportunity to meet the strong demand for high-quality multifamily housing,” Peter Ballon, CPPIB’s global head of real estate, said in a statement.

Although CPPIB refers to the endeavor as a joint venture, the Canadian pension giant will own a 96% stake in the project and LMC, a subsidiary of homebuilder Lennar Corp., will own the remaining 4%.

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CPPIB has also launched a real-estate joint venture in India with RMZ Corp., its second in the country with the local real estate developer. However, while the U.S. joint venture will focus on residential developments, the one in India will focus on developing and holding commercial office space in major cities.

The pension fund said its total capital commitments in the joint venture will be up to C$449 million, to support the development and acquisition of projects in India, which will begin with a 1.37 million-square-foot office building co-owned by RMZ and Prestige Estates in Bangalore, which is one of India’s biggest high-tech hubs. CPPIB said it will acquire Prestige’s stake in the building

“We continue to identify high demand for premium commercial office space in top city locations in India, such as Bangalore,” Hari Krishna V, managing director, real estate, India, said in a statement. “As the city grows as a destination for technology businesses and start-ups, we are working alongside market leaders, such as RMZ, to grow our portfolio to support the demand.”