AlternativesJanuary 13, 2021

CPPIB Invests $650 Million in Real Estate, Renewable Energy

Canadian pension giant targets US multifamily and European wind farm investments.

Reported by Michael Katz

The C$456.7 billion ($359.2 billion) Canada Pension Plan Investment Board (CPPIB) has committed up to a total of $650 million for multifamily real estate development deals in the United States and European renewable energy investments.

CPPIB has formed a joint venture with South Carolina-based real estate developer Greystar Real Estate Partners to pursue multifamily real estate development investments in certain US markets. The Canadian pension giant will pony up $350 million in equity toward the joint venture for a 90% stake, while Greystar has invested $39 million for the remaining 10%. Under the terms of the joint venture, Greystar will manage and operate the portfolio.

“There is a significant undersupply of rental housing in the US,” Hilary Spann, CPPIB’s head of real estate Americas, said in a statement. “Despite the global pandemic and short-term economic uncertainty, there continues to be an opportunity for long-term investors to develop high-quality multifamily properties in growth markets.”

The joint venture will develop class A, mid-, and high-rise multifamily properties in urban and inner-ring suburban communities in major American markets, including coastal markets and other regions that have a high population and strong job growth.

CPPIB also committed up to €245 million ($300 million) to its UK-based platform Renewable Power Capital Limited (RPC), which it launched last month, to support its first investment in European renewable energy.

RPC will acquire a 100% interest in a portfolio of three wind farms in Finland from Swedish renewable power generation company OX2, which will build the wind farms under an engineering, procurement, and construction contract. OX2 will also be responsible for the technical and commercial management of the wind farms. The three wind farms are expected to be operational in 2022, at which point the portfolio is expected to produce nearly 590 GWh per year, which is equal to the amount of electricity consumed by approximately 118,000 households.

“Our new commitment to support RPC’s initial investment in Finland is fully aligned with our goal of deploying long-term, flexible capital in an attractive renewables market,” said Bruce Hogg, CPPIB’s head of power and renewables. “We continue to see a strong pipeline of other renewable opportunities in RPC’s high priority markets.”

RPC will invest in solar, onshore wind, and battery storage, among other technologies in Europe. CPPIB has made approximately C$9 billion of equity commitments to renewable energy globally as of Sept. 30, with investments in onshore wind, offshore wind, solar, hydro, and associated storage and distribution assets.