Canada Pension Plan Investment Board (CPPIB) has made its first real estate debt investment in Australia and New Zealand via CAD$480 million of seed lending for Challenger Investment Partners’ (CIP) new fund. CIP, an Australia-based institutional fund manager with approximately CAD $18.2 billion in assets under management, will oversee the fund.

The move is in line with CPPIB’s expanded investment in new asset classes and associated growth strategy in Asia Pacific. The fund will provide alternative financing for properties in Australia and New Zealand’s key gateway cities.

“We believe these markets offer compelling investment opportunities,” affirms Geoffrey Souter, managing director and head of private real estate debt with CPPIB.

CIP will originate senior and subordinated loans, to be backed by stabilized, transitional and development assets.

“We look forward to working with CPPIB in deploying the A$500 million into high-quality real estate transactions,” says Gerard Hargraves, CIP’s head of real estate debt. “CIP is very pleased to work with CPPIB, a leading player in real estate debt globally.”