TORONTO — Two of Canada’s biggest pension plans are spending a total of $80 million to buy full ownership in a beachfront shopping centre in the Brazilian resort city of Rio de Janeiro.
The Canada Pension Plan Investment Board said Wednesday it has invested $40 million in the Botofogo Praia Shopping along the Botofogo beach, acquiring a 24.5 per cent stake.
Caisse de depot et placement du Quebec, through its Ivanhoe Cambridge real-estate arm, has paid $40 million to increase its stake in the 138-store shopping centre to 75.5 per cent as a result of the transaction.
“This asset nicely complements our existing Brazilian portfolio, which now includes three retail properties, two office developments, and eight industrial projects,” said Peter Ballon, head of real estate investments, Americas for Canada Pension Plan Investment Board.
“We are also pleased to be investing alongside Ivanhoe Cambridge, a well-aligned partner with significant experience in Brazil’s retail sector,” Ballon said in a news release.
The Canada Pension Plan Investment Board invests funds that aren’t required to pay for current retirement benefits under the federally administered CPP. The Caisse manages Quebec’s public sector pensions.
Pension plans often invest in shopping malls and other types of real-estate because they can generate cash flows over long periods of time, in line with the benefit obligations to retirees.
Ivanhoe Cambridge is one of the 10 largest real estate companies in the world, with assets in 24 countries valued at over C$30 billion as of Dec. 31.