PSP Investments and Nuveen launch $790 million grocery-anchored retail venture

PSP Investments and Nuveen Real Estate have launched a joint venture with an initial $790 million to buy grocery-anchored open-air shopping centers in the U.S., and it has already closed on 19 properties.

The acquisitions total roughly 3 million square feet across Arizona, California, Colorado, Florida, Minnesota, Texas, Virginia and Washington, IREI reported. Two of them were portfolio deals: six centers of about 801,000 square feet in markets including Dallas–Fort Worth, Fort Lauderdale, Los Angeles, Minneapolis, Orange County and San Diego, and 11 properties of about 1.9 million square feet in California, Colorado and Washington. The two portfolios account for 17 of the 19 properties and roughly 2.7 million of the 3 million square feet.

The venture is buying centers anchored by grocery retailers, necessity-based retailers and essential services in metropolitan areas with strong population growth, rising household incomes and high barriers to entry.

“We have been reshaping our U.S. retail exposure around a much tighter definition of the sector: open-air centers anchored by grocers and daily-needs tenants, which aims to deliver a steady, inflation-linked income for our portfolio,” said Julien Roy-Décary, managing director of real estate investments for the Americas at PSP Investments.

The retail vehicle is the newest in a run of U.S. commitments for the Public Sector Pension Investment Board. In September it put capital behind a $2.4 billion industrial venture with Ares built around Marq Logistics' sourcing pipeline; in August it joined the Blackstone-led consortium taking Toronto-listed H&R REIT private; this month it signed a definitive agreement to sell Sunrise, which operates more than 230 communities in the U.S. and Canada, to funds managed by BDT & MSD.