New partnership hands the pension investor 3 million square feet across eight US states
The Public Sector Pension Investment Board has committed to a joint venture with an initial investment of US$790m aimed at building inflation-linked income from open-air shopping centres in the United States.
Partner Nuveen Real Estate and PSP Investments have closed on 3 million square feet across 19 assets in Virginia, Arizona, Florida, Minnesota, Texas, California, Colorado, and Washington.
The venture targets centres anchored by market or category dominant grocers, necessity-based retailers, and essential services, in US metro areas with population growth, rising household incomes, and high barriers to entry.
Two portfolio deals account for most of the square footage.
The first covers six open-air centres totalling approximately 801,000 square feet in Fort Lauderdale, San Diego, Orange County, Dallas-Fort Worth, Minneapolis, and Los Angeles.
The second is an 11-property portfolio of approximately 1.9 million square feet in California, Colorado, and Washington.
Individual acquisitions include The Shoppes of Lorton Valley, a 110,000-square-foot grocery-anchored centre in Lorton, Virginia, anchored by Giant, and Las Tiendas Village, a 188,000-square-foot community centre in Chandler, Arizona, anchored by Sprouts.
Julien Roy-Décary, managing director, real estate investments, Americas at PSP Investments, said the fund has narrowed its US retail exposure to “open-air centers anchored by grocers and daily-needs tenants.”
Roy-Décary said the holdings aim to deliver “steady, inflation-linked income,” with Nuveen supplying the sourcing reach and operating depth the portfolio requires.
Brian Wallick, portfolio manager, retail at Nuveen Real Estate, said “necessity-based retail has demonstrated remarkable resilience through various cycles, underpinned by consistent consumer demand for essential goods and services.”
Wallick said, “coupled with PSP Investments’ long-term capital, this venture is designed to deliver both durable income and long-term value creation.”
