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Canada’s CPP acquires Trafford Centre

written by Bella Palmer
canada-cpp

The value of the deal was not disclosed due to its nature as a share right exercise but is thought to be around £800m

Canada Pension Plan Investment Board, which trades as CPP Investments, has scooped up the mall’s ownership by exercising share rights as the main secured creditor of the asset’s owner, Intu Trafford Centre Group.

CPP has acquired the 2.2m sq ft shopping centre in Trafford, Greater Manchester, through its wholly owned subsidiary CPPIB Credit Investments.

The value of the deal was not disclosed due to its nature as a share right exercise but is thought to be around £800m – significantly below the Trafford Centre’s last valuation of £1.2bn before its owner Intu Properties collapsed into administration in June.

CPPIB Credit in 2017 provided a £250m loan facility to Intu Trafford Centre Group, a special purpose subsidiary set up by Intu to own and manage the mall. The loan was secured by the equity interest in the Trafford Centre.

In June, Intu appointed administrators at professional services firm KPMG and a sale process was initiated for the Trafford Centre, however no viable bids were received.

CPP said in a statement today: As the principal secured creditor of Intu Trafford Centre Group, with security over the equity interest in the Trafford Centre, and in the absence of alternative sources of funding and the unsuccessful sale process, CPPIB Credit has exercised its rights to acquire the shares in ITCG and the ownership of the Trafford Centre.

The mall was built by local landowner the Peel Group in the late 1990s and opened to the public in 1998. In 2011, Peel sold it to Capital Shopping Centres (which later rebranded as Intu) for £1.6bn but retained a 24.6% stake in Intu, which collapsed into administration this year after failing to strike a deal with lenders to pay down an estimated £4.5bn in debt.

The Trafford Centre has continued to operate throughout the administration process, along with Intu’s other 16 UK shopping centres, which are also owned by independent special purpose vehicles.

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