CIC Teams with AEW to Close on $1.44B European Mall Portfolio

China Investment Corporation (CIC) has joined with investment manager AEW Europe to acquire a fleet of 10 malls in France and Belgium from CBRE Global Investors for €1.3 billion ($1.44 billion).

The retail acquisition is believed to be the largest yet for CIC, which is China’s biggest sovereign wealth fund and is part of a growing wave of investments by Chinese institutional investors in Europe.

The price paid exceeds CBRE Global Investors reported asking price of €1.2 billion ($1.35 billion), and is well in excess of the $1.2 billion that the two sides were reported to have agreed upon by the French media last month.

Buying 10 Malls in France and Belgium

CIC made the acquisition through a subsidiary, and presumably has teamed with AEW Europe to rely on the asset management skills of the investment firm. Neither CIC or AEW have yet commented publicly on the deal.

The mall portfolio includes two major shopping centres near Antwerp in Belgium, and eight malls in France. The retail centres were sold on behalf of CBRE Retail Property Fund France Belgium CV (RPFFB), as the fund is close to reaching maturity.

Morgan Stanley acted as sole financial advisor to RPFFB, and the portfolio is said to have been on the market since January.

Sophie van Oosterom, Chief Investment Officer EMEA, CBRE Global Investors said: “This transaction is a great achievement for our platform and clearly demonstrates our strong capabilities of executing on a focused investment strategy and creating value for our clients.”

Europe Gets More interesting for the Chinese

The acquisition by CIC follows just two weeks after Fosun Property Holdings, the real estate wing of China’s largest private investment firm set up a new European joint venture to acquire more assets in the region.

Fosun said at the time that Resolution Property Investment Management, the new JV, would be looking for new opportunities in continental Europe.

For CIC, the European acquisition is its most recent since the wealth fund acquired a London office park from Blackstone for ₤800 million ($1.24 billion) in November 2013. The fund has reported disappointing results from some of its earlier investments, and earlier this year formed a new division, CIC Capital, to handle its direct acquisitions and disposals.

Gingko Tree Investment, the wealth fund charged with investing China’s foreign exchange reserves, has been more active than CIC, purchasing an office tower in Belgium in December, and teaming up with the UK’s Crown Estate, to buy a shopping mall in England last year.