By Mario Marroquin
A joint venture by the real estate arm of the Ontario
Teachers’ Pension Plan, Cadillac Fairview, and Boreal IM made inroads into
European logistics this week when it closed on the acquisition of two
industrial parks in the U.K. and the Netherlands.
Cadillac Fairview and Boreal acquired 1.1 million square
feet (109,000 square meters) in West London and in Rotterdam for €250 million (US$268
million) as part of a venture to assemble a €3 billion European logistics portfolio.
“The acquisition of these assets marks the first step in our
mandate with Cadillac Fairview,” Louis-Simon Ferland, founder and partner at
Boreal IM said. “We will be focusing on assets across core European locations
where fundamentals support outsized demand for logistics assets.”
In London, the JV acquired four warehouses from portfolio
manager abrdn while the acquisition in Rotterdam comprises six industrial
buildings in the Port of Rotterdam. The venture partners said that as part of a
forward Environmental, Social, and Governance (ESG)
strategy, all properties will be measured for benchmark carbon footprints and
upgraded.
The European logistics portfolio under construction will
target existing and new development developments in the U.K., Germany, France,
Netherlands, Spain and Italy according to Cadillac Fairview.
News of the European logistics portfolio comes six months
after the Ontario Teachers’ Pension Plan reported an underperformance, relative
to the local benchmark return, for its real estate assets which are wholly
managed by Cadillac Fairview.
The pension plan attributed the underperformance in real
estate to an overexposure to the portfolio’s office and industrial real estate
in Canada.
Ontario Teachers’ reported a 2.5% return in real estate,
which consists of 52% Canadian retail and 29% in Canadian office.
The asset mix selection listed in the pension’s annual
report for 2021 states real asset exposure increased 16% from $44.9 billion to
$52.3 billion with the majority of exposure coming from the infrastructure
portfolio.
Ontario Teachers’ committed $11 billion in 2021 towards
diversification efforts in Europe.
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