June 20, 2006

By Frederic Tomesco

Montreal - Ontario Teachers' Pension Plan, Canada's second-biggest pension fund manager, may bid for a stake in the Victoria & Alfred (V&A) Waterfront worth as much as C$1 billion (R6.15 billion).

"We, among many others, are looking at" the V&A Waterfront, in which Transnet plans to sell a 77.4 percent stake, said Peter Sharpe, the head of the fund's Cadillac Fairview property unit.

About 80 percent of Cadillac Fairview's C$13 billion in property is in Canada, with 10 percent overseas.

The unit planned to double that to 20 percent in the next five years and was "actively looking" at projects in the UK and Brazil to bolster investment gains as North American prices rise, Sharpe said.

"Properties are so expensive in North America now," he said yesterday. "There is so much capital pursuing real estate development that for pension funds to invest and make the returns they need, it's almost impossible in North America."

Transnet announced plans to sell its V&A stake last month. The deadline for bids is July 24, and a winner should be chosen by the end of September, Transnet chief executive Maria Ramos has said.

In the UK, Cadillac Fairview owns about 9 percent of London's Canary Wharf. It might invest in new projects on the site with British investors, Sharpe said. He declined to name potential partners, saying only that Cadillac Fairview had held talks with "about half a dozen" companies.

Cadillac Fairview was examining shopping centre investments in Brazilian cities such as Brasilia, Curitiba and Sao Paulo, Sharpe said.

"We think there is very strong potential for good growth in Brazil in the next few years. Brazil is a huge market, it's a politically stable country and it has paid its foreign debt. There is a growing middle class, which is what gives you tremendous opportunities."

Caisse de Depot et Placement du Quebec, Canada's largest pension fund manager, said earlier this month that it might spend as much as C$100 million to buy stakes in Brazilian malls this year. - Bloomberg