Canada Pension Plan Investment Board (CPPIB) and Longfor Properties Co. Ltd. have entered into a second joint venture to invest in Chongqing West Paradise Walk shopping center in China.
As part of the joint venture, CPPIB will commit approximately C$193 million (US$146 million) for a 49% interest in the property.
Representing CPPIB's first retail mall investment in Chongqing, one of China's largest cities with a population of over 30 million, West Paradise Walk is a six-level shopping mall built in 2008.
CPPIB and Longfor established its first joint venture in 2014 with a mixed-use real estate project in Suzhou, which included the development of a Paradise Walk mall.
"We are pleased to extend our existing relationship with Longfor Properties through this joint venture in West Paradise Walk," says Jimmy Phua, head of Real Estate Investments, Asia at CPPIB, in a statement. "This joint venture fits well with our investment strategy and allows us to invest alongside a highly experienced partner in a high-quality real estate asset that will provide attractive risk-adjusted returns over the long term."
West Paradise Walk is located in the heart of one of Chongqing's most established commercial areas, the Yangjiaping commercial hub. The mall currently maintains high customer traffic and occupancy rates with tenants including major local and international retail chains.
"This second joint venture is another milestone in this partnership following the Suzhou Times Paradise Walk project," says Zhao Yi, chief financial officer of Longfor Properties.
CPPIB is an investment management organization that invests the funds not needed by the Canada Pension Plan (CPP) to pay current benefits on behalf of 19 million contributors and beneficiaries. As of June 30, the CPP Fund totaled C$287.3 billion.
Longfor Properties is a property developer of high-rise apartment buildings, low-rise garden apartments, townhouses, detached villas, as well as shopping malls and other commercial properties.
To date, it has opened 17 shopping malls with a total area of over 1.5 million square meters.