APG Algemene Pensioen Groep NV and the Canada Pension Plan Investment Board each will buy 25% of Europe’s biggest mall for a total of £871.5 million ($1.4 billion).
Westfield Group, the world’s largest owner of shopping centers, will sell a 50% stake in the Stratford City development next to the 2012 Olympic site in east London, according to a Westfield regulatory filing Monday.
“The group will significantly improve its return on invested capital from the development and will remain a long-term investor, property manager and developer” of the center, Westfield Managing Director Steven Lowy said in the statement.
Westfield said it will book a development profit of about £300 million on Stratford City as a result of the deal. It expects to complete Stratford City, which has 1.9 million square feet of retail and entertainment space, in the third quarter of 2011. About 75% of the space is already leased or committed, the company said.
The investment in Stratford City is the third by the C$138.6 billion (US$138.2 billion) CPPIB, Toronto, in U.K. commercial real estate in less than a year. In August, it bought a stake in an office in London’s main financial district together with U.K. developer Hammerson PLC. The two also teamed up to buy Scotland’s second-biggest mall in December.
APG manages the assets of the €218 billion ($296 billion) Stichting Pensioenfonds ABP, Heerlen, Netherlands.