The Canada Pension Plan Investment Board (CPPIB) is investing in a Birmingham development with Hermes Investment Management.
The Toronto-based institution is taking a 50% share in the 拢150m (鈧�193.8m) first phase of Hermes鈥檚 拢1bn Paradise Birmingham development.
CPPIB a 50% stake in Hammerson鈥檚 nearby Grand Central mall.
The 1.8m sqft Paradise Circus project, currently owned by Hermes and Birmingham City Council, is being developed by Argent.
The joint venture is phasing development.
Its first two blocks, One and Two Chamberlain Square, are due for completion in 2018, to be followed by more sections between then and 2025.
In addition to office space, the project will also include retail and hotel elements.
Andrea Orlandi, managing director and head of real estate investments for Europe at CPPIB, which has previously invested with Hermes at Wellington Place in Leeds, said: 鈥淭his new joint venture in Birmingham builds on and extends our strong relationship with Hermes Investment Management and provides an excellent example of CPPIB鈥檚 partnership strategy.
鈥淭he Paradise Birmingham development is a high-quality real estate investment in an important region in the UK and fits well with our long-term investment approach.鈥�
Chris Taylor, head of private markets at Hermes Investment Management, said Birmingham was a leading business destination.
Chris Darroch, Hermes fund manager, the decision to build speculatively was based on the belief large UK cities such as Birmingham posed less risk of oversupply.
鈥淚n UK provincial cities, there is a risk if everyone turns the taps on at the same time,鈥� he said. 鈥淏ut the lack of development finance from banks means there鈥檚 little risk of that.鈥�
Darroch said Birmingham was not only seeing internal moves by office tenants but also experiencing demand from occupiers looking to increase space.
