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Ivanhoe aims to increase commercial assets under management

Ivanhoe Cambridge Inc., the real estate arm of one of Canada’s biggest pension funds, is planning to increase its assets by a third with a bet on the booming warehouse space.

The unit of Caisse de Depot et Placement du Quebec will aim to expand its assets under management to $80 billion over the next five years by adding apartments, offices, and industrial space, president Nathalie Palladitcheff said.

“Industrial is the most global thing that we could imagine doing,” Palladitcheff stated in an interview with Bloomberg. “It’s a natural hedge to shopping centers because of e-commerce and the evolution of the way people are consuming.”

Ivanhoe is intending to double its industrial portfolio to more than $4 billion by the end of the year, Palladitcheff said. The Montreal-based company is already in talks to partner with Blackstone Group LP in a $2.48-billion cash deal to take Vancouver-based Pure Industrial Real Estate Trust private, a spokesman for Ivanhoe confirmed.

Warehouses are soaring in value amid a global shift to e-commerce and the need for logistics centers in the Inc. age. Canada’s industrial vacancy rate dropped to 3.9% at the end of last year, the lowest since 2001, according to Cushman & Wakefield.

Prior to this, Ivanhoe has invested in Australia’s Logos Property Group to develop industrial premises in countries such as China and India, while exploring new opportunities in Indonesia and Malaysia.

“We are following the tenants everywhere,” Palladitcheff said. “We didn’t have in our plans at the time of the transaction to go to India for example, but as soon as we saw that it made sense for the tenant to do that we have been agile enough to adapt to that.”

Ivanhoe, which owns several apartment buildings in San Francisco and Montreal, is also planning to expand its residential portfolio. It’s targeting the U.K. as well as the U.S., given its size and growing rental market since the 2008 financial crisis, said Palladitcheff.

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