The Canada Pension Plan Investment Board (CPPIB) – rebuffed by the Labour government when it tried to buy 40% of Auckland International Airport Ltd in 2007 – has joined another Canadian pension fund as 50% owner of the AMP Capital Property Portfolio.
The Canadian Public Sector Pension Investment Board (PSP Investments) bought what was then the 18-property AMP Capital Property Portfolio, an unlisted portfolio for institutional investors, from AMP Capital Investors (NZ) Ltd for $1.1 billion in 2014.
The portfolio now comprises 13 properties valued at $1.03 billion, including the Botany Town Centre & Manukau Supa Centre in Auckland and the St Pauls Square office building in Wellington, which is undergoing a $38 million refurbishment with a new 15-year lease to the Government on completion. AMP Capital still manages it.
AMP Capital portfolio manager Nick Cobham said yesterday the deal “underlines institutional investor confidence in the New Zealand economy & property market and positions AMP Capital to take advantage of growth opportunities both within the existing portfolio as well as through acquisitions.
“We are pleased to welcome another leading global investor into our diversified property portfolio. This is CPPIB’s first investment into New Zealand, taking the opportunity to invest in a quality diversified property portfolio that is well placed to continue to benefit from strong New Zealand economic fundamentals. Investors continue to be attracted to the stability of the domestic property market, which is supported by a range of government & private capital initiatives along with strong population growth.
“By introducing another investor into the portfolio, our current investor, PSP Investments, has a strong & likeminded partner. With both investors’ support, we can look forward to further improving investment returns as the portfolio participates in redevelopment and further acquisitions in the office & retail sectors in the near future.”
In 2008, Land Information Minister David Parker & Associate Finance Minister Clayton Cosgrove jointly declined the Canadian Pension Plan Investment Board’s application to buy 40% of Auckland International Airport Ltd. In essence, the ministers’ decision amounted to a statement that foreigners can’t just replace another investor in sensitive assets, they have to demonstrate a positive contribution beyond the norm.
The new deal is still subject to Overseas Investment Office approval.
11 July 2014: AMP Property sells $1 billion portfolio, NZ Super Fund looks for new investments
13 April 2008: Essence of airport bid refusal: Demonstrate a positive contribution
Attribution: Company release.