One of Canada’s biggest public pension funds, Québec’s CDPQ, is set to see an increase in its Asia property exposure as its real estate arm Ivanhoé Cambridge looks to expand its investments in the region’s logistics, residential, life science and mixed use sectors.
Ivanhoé has opened a new office in Sydney, Australia, which it sees as a springboard into the rest of Asia-Pacific. The new office is seen as being in line with the subsidiary’s development strategy for the region and signifies its desire to increase investment in Singapore, Australia, India and Japan. The Sydney office will be headed by Rodney Fung, Head of Portfolio and Asset Management, Asia-Pacific. He will be supported by Edwin Tong, who joined Ivanhoé Cambridge in mid-2022 as Director, Investments and Asset Management, Asia-Pacific. Chanakya Chakravarti, Ivanhoé’s Head of Indirect Strategies, Asia-Pacific, will continue to sit in Mumbai, India, indicating that CDPQ is set to continue its push in South Asia; CDPQ itself established an office in Delhi in 2016. Chakravarti is also taking responsibility for funds, co-investments as well as the real estate subsidiary’s interests in listed investments.
Ivanhoé has a C$7 billion (US$5.2 billion) Asia-Pacific portfolio, representing around 8% of its total AUM, with a mandate to develop and invest in high-quality properties, projects and companies that are shaping the urban fabric of cities around the world. It aims to double its allocation to the region in the medium-term.
This year has seen the Canadian real estate investor make significant in-roads into the Asian market. Last month, Ivanhoé invested A$1 billion in funding for Australian student housing operator Scape. The fund, Scape Core Program, is the largest in the country, with a portfolio in Sydney and Melbourne with more than 13,000 beds. Overall, Scape controls 16,000 beds nationally with a further 9,000 under construction. In May, the CDPQ subsidiary partnered with real estate firm Lodha and Bain Capital to create a US$1 billion platform of logistics and light industrial parks in India.
Agethen told Asian Investor, “India launched its REIT market a few years ago and that seems to be going very well. There’s also a boom in manufacturing and I think India is a major contender for that China plus one diversification strategy.”
Canadian public pension funds are paying increasing attention to Indian real estate. In September, the Ontario Teachers’ Pension Plan Board (OTPP) established a new office in India, as it ramps up its exposure to the South Asian heavyweight in emerging markets. “India is an attractive investment destination and will be one of our growth markets over the next 5-10 years. It has a large, growing, and dynamic economy, with openness to foreign capital which makes it a strategically important market for us,” said Jo Taylor, OTPP's President and Chief Executive Officer.
Infrastructure is the main target for state-owned investors in India. Canadian public pension funds remain a dominant feature, now representing 44% of the US$19 billion of inward investment by state-owned investors in Indian infrastructure from 2016, with CPP the biggest Canadian investor representing 16% of the total. The leading sovereign investor in the sector is GIC, representing 24% of the total with its Singaporean stablemate Temasek contributing a further 5%. The UAE is another significant investor in the Indian infrastructure sector, with the combined muscle of ADIA, Dubai World, and Mubadala representing 19% of foreign sovereign capital in Indian infrastructure.
However, real estate is gaining momentum. Earlier this month, GIC formed a new platform with ESR to acquire US$600 million of income-producing core industrial and logistics assets in India, with the Singaporean sovereign wealth fund contributing 80% of the capital and ESR 20%. The Core JV represents an extension of the existing partnership in India between the two, which was initiated in 2020 with a commitment of US$750 million and the same 80:20 split. The partners are anticipating a surge in demand for logistics and industrial real estate, fuelled by India’s e-commerce growth and expanding industrial base.
Image Courtesy of Ivanhoé Cambridge
