CPPIB and Longfor Properties extend JV in China

Canada Pension Plan Investment Board (CPPIB) and Longfor Properties Co. have extended their cooperation to include two new mixed-use real estate development projects in Chengdu and Shanghai in China, for a total CPPIB commitment of approximately RMB 4,200 million ($648 million).

“Both cities are well positioned to capitalize on the future economic growth and harness the returns of growing consumption in China,” said Jimmy Phua, managing director, head of real estate investments Asia, CPPIB. “These projects deliver on CPPIB’s strategy to grow our investments in the Chinese real estate sector, specifically in the fast-growing retail sector. The investments will help CPPIB diversify its real estate interests in China, providing attractive risk-adjusted returns over the long term.”

The mixed-use development project in Chengdu, the capital of Sichuan province with a population of 16 million, is comprised of approximately 7.96 million square feet for residential and commercial use. The project is attractively and ideally situated in the East part of Chengdu and contains excellent commercial transportation links, offering great accessibility to the city center. The site will include a Paradise Walk shopping mall of approximately 1.51 million square feet. The large residential component is expected to service the increasing residential demands of Chengdu.

The Shanghai site is approximately 3.66 million square feet and is situated in South Minhang, one of the city’s fast-growing suburban areas. The project will comprise retail and commercial components and is ideally located in terms of transport links and its proximity to two universities, as well as the Zizhu technology hub. It, too, will include a Paradise Walk shopping mall.

“The mixed-use sites in Chengdu and Shanghai are both ideally located, high-quality assets that are expected to offer strong future returns. Our expertise in real estate development as well as in mall operations and management will help us deliver value to our shareholders and partners,” said Zhao Yi, executive director and CFO of Longfor Properties.

Longfor is a residential and retail mall developer and operator in China, and has built a strong brand, experienced retail team, and a wide network of local and international tenants in the Paradise Walk malls.

CPPIB and Longfor first collaborated in 2014 with a mixed-use real estate project in Suzhou, which included the development of a Paradise Walk mall.