Canada’s Top Pension Fund Eyes $2B Industrial Buying Spree

Canada’s largest pension fund is doubling down on warehouses.

Canada Pension Plan Investment Board formed a joint venture with Dream Industrial Real Estate Investment Trust to acquire up to C$3 billion, or about $2.2 billion, of industrial real estate across Canada, the firms said Wednesday. Bloomberg reported that the CPPIB is committing C$1 billion in equity, while Dream Industrial is kicking in C$100 million.

The venture will get a running start by acquiring 12 industrial properties from Dream Industrial for C$805 million. The assets span Ontario, Quebec and Alberta.

Higher interest rates, shifting workplace habits and capital market volatility have weighed on returns for CPPIB, with the pension plan’s real estate portfolio generating just 0.5 percent annually over the past five fiscal years, Bloomberg reported. Real estate made up 7 percent of CPPIB’s total assets as of March 31.

Industrial has been a relative bright spot for the pension plan. CPPIB said logistics investments saw increased tenant and investor demand for most of that five-year period, buoyed by e-commerce growth and supply chain reconfiguration. That resilience has made warehouses one of the few sectors still capable of attracting large-scale institutional capital, according to the outlet.

The Dream Industrial partnership adds to CPPIB’s growing slate of real estate joint ventures. In August, the pension expanded its U.S. residential platform with Greystar, allocating $895 million in equity to develop and acquire communities of rental homes. The fund has also been vocal about leaning back into domestic investments, as Canada’s government pushes to draw more private capital into homegrown projects.

This year alone, CPPIB invested C$50 million in AI startup Cohere and backed Wealthsimple Financial’s C$750 million equity raise. The pension plan’s total assets stood at C$777.5 billion as of Sept. 30, Bloomberg reported.

A subsidiary of Dream Asset Management, the institutional arm of Dream Unlimited, will manage the industrial venture.

— Eric Weilbacher