Canada Pension Plan Investment Board (CPPIB) says that it has formed a new venture with China Vanke Co., Ltd. Through this venture, CPPIB will invest US$250 million over time in the Chinese residential market, according to a company release.
The venture will focus on new residential development projects in large cities across China, where there are rising incomes and strong economic fundamentals, creating significant demand for middle income housing.
Vanke will be responsible for sourcing projects for the venture.
To seed the venture, CPPIB and Vanke are investing in a project located in Qingdao, Shandong Province in China.
"Asia continues to be an important real estate market for CPPIB and one where we already have significant investments in the commercial property and logistics sectors," says Graeme Eadie, senior vice-president of real estate investments for CPPIB.
As of the end of 2013, CPPIB’s investments in Asia totaled 23.4 billion Canadian dollars, representing 11.6% of the total portfolio. The Asia investments include US$4.2 billion Canadian dollars of real estate investments.
Founded in 1984, Vanke is the largest residential developer in China with revenues of over US$22 billion in 2013 and has developments in 65 large- and medium-sized cities across the country and four overseas cities.