CPPIB partners with developer Tricon for two apartment buildings in Toronto

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CPPIB partners with developer Tricon for two apartment buildings in Toronto


The Canada Pension Plan Investment Board and Tricon Residential have allocated $ 500 million in capital to develop up to 3,000 apartments in the Toronto area.

Frank Gunn / The Canadian Press

Canada’s largest pension fund is supporting the development of two new apartment buildings in the heart of downtown Toronto, the latest housing project underway in the country’s most populous city.

The buildings, which will have 870 rental units, will be the first developments in a newly formed partnership between the Canada Pension Plan Investment Board (CPPIB) and developer Tricon Residential Inc.

To start the joint venture, the parties allocated $ 500 million in capital to develop up to 3,000 apartments in the Toronto area. The CPPIB contributes $ 350 million and Tricon the rest. Tricon, an apartment developer in Canada and the United States, will serve as the developer, asset manager and property manager for their properties.

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The joint venture will develop apartments close to major public transport and employment centers – a common goal for many real estate companies.

Tricon and CCPIB declined to provide the exact location of the site, saying the purchase has not yet closed. However, they said the 25- and 32-story buildings would be located on a 1.8-acre site near a future metro station.

Unlike new condo developments where the majority of units are one or more bedrooms, Tricon President Gary Berman said there would be more room in individual apartments. The average unit size is expected to be 680 square feet, which is larger than that of new condos. The developer says there is a demand for larger units.

New apartment buildings are expected to have a gym, rooftop garden, outdoor swimming pool and public park. The project is expected to cost $ 600 million to build, with nearly $ 200 million in capital from the partnership. The rest will be financed by borrowing.

In total, the joint venture plans to spend $ 1.4 billion on development, the bulk of which is debt.

Construction is expected to start next year and take about three years.

This is the Agency’s second partnership with a Toronto real estate developer and comes as it attempts to increase its portfolio of multi-residential properties and reduce its exposure to office and retail – two types of real estate that have lost value during the pandemic.

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The fund has $ 43.1 billion in office, retail, industrial and residential real estate worldwide. It is not known how the CPPIB’s real estate performed during the pandemic, as it does not provide details until after its fiscal year ends in March.

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