CPP in bid for Australian real estate fund

The CPP Investment Board (CPPIB), together with global investors All Pensions Group (APG) and China Investment Corporation, have made a cash offer to acquire ING Industrial Fund. “This transaction is an opportunity for CPPIB to invest in a portfolio of high-quality industrial properties and represents our largest real estate investment in Australia. As a long-term and disciplined investor, we believe that these assets would be a good fit with our existing portfolio and is well-aligned with our real estate investment strategy,” said Graeme Eadie, senior vice-president, Real Estate Investments, CPPIB.

The consortium is offering a cash consideration of $0.546 per Unit on a cum distribution basis (i.e. the consideration will be reduced by any distributions, including the December 2010 quarter, paid or to which unitholders become entitled prior to closing). The offer is consistent with the consortium’s assessment of IIF’s 31 December 2010 fair value NTA, based on independent third party valuations of the IIF portfolio and adjusted for IIF payments triggered on a change of control and sell-side costs.

If the scheme is approved, the consortium will acquire the units through a newly established investment vehicle, Goodman Trust Australia (GTA). GTA will be an unlisted, special purpose investment vehicle with a mandate to hold the IIF portfolio and enhance it by developing IIF’s existing development pipeline. 

GTA will be owned by the Consortium, comprising Goodman holding a 19.9 per cent share, CPPIB holding 42.5 per cent, APG holding 25.2 per cent and CIC holding 12.4 per cent. The transaction represents an expansion of Goodman’s relationship with CPPIB, APG and CIC and provides additional assets under management of $2.6 billion.

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