Lendlease, a leading property and infrastructure group and CPPIB have set an initial target to invest £1.5 billion ($2.076 billion) in the U.K. With an investment of c.£450 million in the next phase of new homes that will be for rent, CPPIB will invest c.£350 million for 80 per cent and Lendlease will invest the balance. The development is at Lendlease’s £2.3 billion ($3.18 billion) Elephant Park development in Elephant & Castle.
Lendlease has already committed c.£800 million previously to housing and infrastructure development in the U.K and the announced sum is in addition to this c.£800 million. The first phases of the homes are expected to be completed in 2020 and the construction for this project has already begun. In addition to this initial investment, the partnership will also explore opportunities in Lendlease wider residential urban regeneration activities in the UK and will be under a 50-50 joint venture.
As part of the strategy to encourage diverse and vibrant communities with a mix of tenures, Lendlease will develop, construct and manage the Build-to-Rent homes following the partnership while providing a high- quality rental product and service.
According to Dan Labbad, CEO of International Operations at Lendlease:
“In recent decades, structural shifts in the housing market have meant that demand has outstripped supply in the private rented sector, leading to a shortfall of homes in London and across the U.K.
“Today’s announcement is a logical next step for us as a business and delivers on our strategy to grow our urban regeneration pipeline and accelerate the delivery of much-needed homes, by working with institutional capital partners to launch this new asset class for Lendlease’s investment platform. CPPIB is already a highly valued, long-term global partner of Lendlease and we look forward to extending our relationship through this partnership.”
Andrea Orlandi, Managing Director, Head of Real Estate Investments Europe at CPPIB also had to say the following about the partnership:
“This investment is a great opportunity for CPPIB to further diversify our European real estate portfolio, while at the same time addressing a need in the U.K. Through this partnership, we are able to access a sector we believe is poised for long-term growth, and we are pleased to be able to do so with Lendlease, one of our existing top global partners.”
Headquartered in Australia and with operations in Asia, Europe and the Americas, Lendlease approximately employs 12350 employees internationally. With a vision to create the best places; places that inspire and enrich the lives of the people around the world, Lendlease core capabilities are Development, Construction and Investments. Recognized as the UK’s Most Sustainable Residential Developer by the NextGeneration Sustainability Benchmark for setting new standards of sustainability and customer engagement for two consecutive years in 2016 and 2017, scoring more than double the industry average, Lendlease main project in London are Elephant & Castle and The International Quarter.
About Canada Pension Plan Investment Board
A professional investment management organization, Canada Pension Plan Investment Board (CPPIB) manages the funds of Canada Pension Plan (CPP) and has a diversified portfolio of CPP assets, CPPIB invests in public equities, private equities, real estate, infrastructure and fixed income instruments. Headquartered in Toronto, CPP fund was C$328.2 billion ($263.5 billion) as of September 30, 2017. It has offices in Hong Kong, London, Luxembourg, Mumbai, New York City, São Paulo and Sydney.