China’s CIC and AEW Team Up to Buy Two French Malls From Grosvenor for $206M – Exclusive

China Investment Corporation (CIC) decided a little retail therapy was in order after announcing it had recorded a loss on overseas investment in 2015 a few months back. For the sovereign wealth fund this shopping binge meant investing €188 million ($206 million) to buy two French malls — its second set of shopping centres in the country.

As with its previous Gallic retail acquisition, CIC has teamed up with private investment manager AEW to purchase and manage the newly acquired assets.

Three French funds managed by AEW bought the Primavera retail portfolio from Grosvenor Europe at the end of September, a spokesperson for the London-based developer told Mingtiandi. Industry sources who spoke with Mingtiandi confidentially indicated that AEW had made the €188 million acquisition on behalf of CIC.

The portfolio consists of Châlons-en-Champagne Croix-Dampierre, located two hours east of Paris, and Marseille Bonneveine, a center in the Marseille suburbs. A Grosvenor-led consortium, which also included the Netherlands’ Bouwinvest and an unnamed Canadian pension fund manager, had acquired the two properties from from mall specialist Unibail Rodamco in 2011 for €148 million, according to published reports.

The CIC-AEW mall acquisition was followed late last month by the Chinese sovereign fund teaming with Morgan Stanley Real Estate Investing to acquire a €1.1 billion ($1.2 billion) German residential portfolio consisting of 16,000 homes.

“This latest acquisition of the two malls, combined with CIC’s investment with Morgan Stanley in Germany, shows the fund’s continued interest in opportunities in continental Europe,” James Shepherd, head of research for Greater China with DTZ/Cushman & Wakefield, said.

Put It In The Bag: CIC Adds To Its French Retail Holdings

The acquisition of the two malls from Grosvenor brings CIC French mall portfolio up to 10 properties, after the fund teamed with AEW last year to purchase eight malls in France. As part of that €1.3 billion ($1.44 billion) acquisition from CBRE Global Investors, CIC also acquired two major shopping centers in Belgium.

And while many mainland investors are focusing on the US market, China’s largest sovereign wealth fund continues to look toward Europe for deals. In addition to the recent retail acquisitions, CIC purchased a London office park from Blackstone for ₤800 million ($1.24 billion) in November 2013.

“CIC was among the pioneers of China’s outbound investment wave, and its preference for European assets could pave the way for more deals from mainland institutions,” Shepherd said.

CIC Regroups After A Rough 2015

Last year was one to forget for CIC after revealing it recorded a loss on overseas investment in 2015 for the first time since 2011. The fund, which is China’s largest cross-border real estate investor, announced it intended to ramp up its real estate efforts this year in the wake of the news.

At the start of 2016, CIC bought three office parks in the southeast of England from Australian real estate developer Goodman for £250 million ($355.4 million). The fund was also in talks to purchase a 50 percent stake in a Melbourne office building for A$500 million ($383 million) in August.

The mainland sovereign wealth fund also made its first significant US acquisition in May when it purchased a 49 percent interest in the 1 New York Plaza office tower from Brookfield Property Partners for $700 million.