Acquisition of LaSalle portfolio implements Canadian strategy | RENX
The diversity of LaSalle Investment Management Canadais very active LaSalle Canada Real Estate Fund (LCPF) was further illustrated with the acquisition of stakes this week in three major properties of Ivanhoé Cambridge.
The three acquisitions included Ivanhoé’s 50% stake in the famous Manulife House to Montreal. Ivanhoé, the real estate subsidiary of Quebec deposit and placement fund, and Manulife had been equal partners in the 27-story, 485,000-square-foot, Grade AAA downtown office building. Manulife is headquartered in Quebec in the tower.
LCPF also acquired a 50% stake in Ivanhoé Guildford Town Center, a super-regional mall with over 200 stores in Surrey, BC, as well as in the 18-acre Ivanhoe development site directly north of the mall.
The price of the wallet was not disclosed.
“For Ivanhoé Cambridge, the sale of 50% of the Guildford Town Center property and 50% of Maison Manulife is another important step in the acceleration of our major portfolio hub,” said Gabrielle Meloche, senior advisor in public affairs and communications from Ivanhoé in an email to RENX.
“In strategic deployment since early 2020, the pivot is to reduce our footprint on overweighted asset classes in order to increase our investments and our presence in promising sectors, such as logistics, to create value for our depositors.
While the deal includes existing office and retail buildings, LaSalle Canada CEO John McKinlay told RENX that the downtown Guildford multi-family development component was key to the overall transaction.
“We’ve been targeting this type of strategy for some time, in terms of using our significant underweight in retail to find the best-in-class multi-family residential density,” McKinlay said in an interview.
The deal took some time to come to fruition, according to McKinlay, who noted RBC and CBRE participated in establishing the relationship between LaSalle and Ivanhoé. He added that LaSalle has an established relationship with Manuvie and that the partnership with Maison Manuvie is “off to a good start”.
LaSalle’s new acquisitions
Maison Manulife is 97 percent leased with a weighted average lease term of 13.7 years. It has direct access to amenities and underground connections to McGill and Peel metro stations.
It was valued at $ 220 million when it was completed in 2017.
Guildford town center is 95.5% leased. It was built in 1966 in the Vancouver suburb of Surrey and has undergone eight renovations in the past 55 years.
It underwent $ 280 million in capital improvements in 2013 and is LEED Gold and BOMA BEST level 3 certified.
“Guildford is absolutely a premier asset, best in class,” said McKinlay. “Ivanhoe is a premier institutional partner who has spent a great deal of capital to keep Guildford up to date, current and renovated.”
The 18 acres north of the mall are being zoned for additional residential density, which LaSalle covets.
As well as having Guildford town center next door, McKinlay said there is also a school, community center and public transport nearby, which adds to its appeal for a mixed-use focused site. on high density residences.
McKinlay said the new partners are still figuring out building sizes and number of units, and mapping phases of development over several years. Multi-family residences will be primarily rental, with the possibility of also including a condominium element as well as ancillary uses.
“Vancouver is the hardest to access market in Canada,” McKinlay said, “and new multi-family rental is just about the hardest to access asset class in Canada.”
LaSalle already manages office and multi-residential buildings in Montreal and Vancouver and is looking to add more, some of which are already in the process of being acquired, according to McKinlay.
LCPF and its acquisition pipeline
LaSalle is focusing on deals similar to the one with Ivanhoé, which McKinlay described as relationship-driven, off-market, programmatic, and involving synergies in what his company can offer and what potential partners are trying to execute.
The LCPF has now acquired assets worth $ 1.8 billion, including 42% in offices and 19% in retail. The LCPF’s industrial allowance is 18.6 percent, which McKinlay would like to increase to 25 to 30 percent while lowering the office allowance percentage to 30.
“We are focusing on a few transactions in a space that is predominantly industrial at the moment, with urban reorientation and medium to long term industrial development,” McKinlay said. “We will always seek to shift this allocation in the short term.
“We like these types of mixed-use deals across multiple asset types so we can keep our overall weightings within a band as we acquire so we don’t go yo-yo – up. in one asset class so the next transaction must be in another asset class.
“We like to keep as much flexibility as possible to buy the best deals and the best assets that we target and structure. “
Despite the 50 percent acquisition of Maison Manuvie, McKinlay said the Ivanhoé Cambridge deal lowers the weighting of LCPF offices while increasing the quality of the portfolio due to other elements of the deal.
The fund has been active on the acquisition front for several months.
The LCPF has acquired a newly constructed logistics portfolio of three Class A buildings comprising over 600,000 square feet in the Greater Toronto Area of Carttera in August.
In March, it acquired a fully leased 527,568 square foot distribution center in Brantford, Ontario, west of Hamilton, as well as a 47.5% stake in the Curtain and chapel multi-family development in Ottawa.
The players in these new partnerships
LaSalle Canada has executed over $ 7 billion in real estate transactions since 2000. The LCPF was launched in 2017 as an open-ended fund targeting commitments from Canadian and global institutional investors to acquire key properties in major Canadian markets. .
LaSalle Investment Management managed approximately US $ 73 billion in assets in private and public real estate and debt investments at the end of 2020.
Through subsidiaries and partnerships, Ivanhoé Cambridge holds interests in more than 1,100 buildings, mainly in the industrial and logistics, office, residential and retail sectors. It held $ 60.4 billion in real estate assets at the end of 2020.
Manulife is an insurance company and financial services provider headquartered in Toronto with more than 37,000 employees serving approximately 30 million customers in Canada, the United States and Asia.
It had $ 1.3 trillion in assets under management and administration as of March 31, 2021.