The CPP Investment Board has made its first investment in commercial real estate ownership with a joint-venture interest in five shopping centers.

It has committed $200 million to Osmington Inc. to build a co-owned income-property portfolio with value-added growth potential over normal real estate cycles. Yet to be developed is a second strategy to build a real estate portfolio of high-quality core properties that will be held for the long term. Both strategies will diversify Canada Pension Plan assets beyond equities and bonds and enhance the long-term risk-adjusted returns of the total portfolio.

Osmington and Redcliff manage approximately $1 billion of properties for Canadian
institutional investors and Osmington, itself. The first joint investment with the CPP Investment Board is the approximately $300 million acquisition from The Cadillac Fairview Corporation of five shopping centres in Thunder Bay, Sudbury, Hamilton,
Stoney Creek and Cornwall. The portfolio totals just over 2.2 million square feet of leasable area and is virtually fully leased.

The long-term plan is to invest up to 5% of Canada Pension Plan equity assets in real estate and infrastructure. With assets under management expected to reach $160 billion by 2012, as much as $8 billion could be invested in real estate and infrastructure in less than 10 years.