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Ivanhoé Cambridge Appoints 25-Year Veteran Palladitcheff as President

Nathalie Palladitcheff Becomes One of the Highest-Ranking Women in CRE; Says Logistics Are Key Focus for Future
March 6, 2018
Pictured: Nathalie Palladitcheff, the new president of Ivanhoé Cambridge.

Ivanhoé Cambridge has a new president, appointing 25-year finance and real estate industry veteran Nathalie Palladitcheff to the position that makes her one of the highest-ranking women in Canadian commercial real estate.

The subsidiary of the Caisse de dépôt et placement du Québec has more than $60 billion in assets, and Palladitcheff will be responsible for making sure the real estate company's global investment strategy matches its growth and performance targets.

"The job to come from $30 billion to $60 billion (in assets) over the last few years was something, definitely, and it's going to be another challenge to go from $60 billion to the next step," she said in an interview, adding real estate in the area of logistics is at the top of the company's radar.

Palladitcheff told CoStar News that it is not lost on her that her ascension as one of the country's leaders in the commercial real estate industry is another breakthrough for women.

There are other women in key top jobs in Canada, including Toni Rossi, the president of the real estate division of Infrastructure Ontario, and Hilary Spann is managing director, head of Americas, for real estate investments of the Canada Pension Plan Investment Board. In the publicly-traded world, Jane Gavan is chief executive of Dream Global Real Estate Investment Trust and Lois Cormack is chief executive of Sienna Senior Living Inc.

"What I said to the board when they made this decision is one side it is a very big responsibility because it is a great honour. On the other side, I can tell you it's a great challenge for women," said Palladitcheff. "I can tell you when my promotion was announced I received 80 percent of female congratulations. There is a ceiling that women think exists and I can be living proof that if there is a will and there is way, especially in this company and this group."

She joined Ivanhoé Cambridge in April 2015 as executive vice president and chief financial officer. She has also been responsible for financing, strategic planning, in addition to heading the company’s IT and human resources departments.

Ivanhoé Cambridge also named Alfonso Graceffa as its head of business units, reporting to the CEO. He will remain president of and chief executive of Otéra Capital, one of the largest commercial real estate debt lenders in Canada

"The global real estate market is becoming increasingly complex. We need to be very agile to deploy our capital and, more than ever, we must leverage our leading-edge expertise to tackle the challenges ahead of us," said CEO Daniel Fornier, in a statement. "Nathalie has made a significant contribution to the transformation of Ivanhoé Cambridge. As president of Otéra Capital since 2012, Alfonso was instrumental in delivering strong results year after year, all while refocusing the company’s activities with strong governance rules and business practices."

The rising interest rate environment might be the most significant challenge she faces in her new job, says the incoming president of Ivanhoé Cambridge.

"There will probably be less competition (to purchase real estate)," Palladitcheff said. "When interest rates rise, we will see who are the real experts and who are the real professionals."

Almost one-third of the real estate company's assets are in Canada "so that's the history of the company and it will be like that forever," but diversification is key to Ivanhoé Cambridge as it looks to reduce risk to retirees on whose behalf it is investing.

"One of our competitors told me we are probably in the best position to face any kind of events in the future of the market because of our diversification," said Palladitcheff.

Retail has long been a strong focus of Ivanhoé Cambridge, which confirmed it has sold a 50 percent stake in Fairview Mall in Toronto and Richmond Centre in British Columbia, but increasingly the company is looking at demographics, and that points it to logistics investments.

"What we have been active on over the last few week has been logistics," Palladitcheff said, referring to a deal this year that saw it team up with Blackstone Group LP to buy Pure Industrial Real Estate, paying $2.48 billion for a 40 percent stake in the publicly-traded Toronto industrial landlord, according to published reports.

In the logistics field, the company is focused on what is called "light industrial" but also the "last mile" segment of the e-commerce market. In July, Ivanhoé Cambridge completed a deal for Evergreen Industrial Properties, which included a portfolio of 150 properties and 16 million square feet across 18 U.S. Centres.

"We've done the same type of deals in central Europe, and we are very active in Asia too with a partner," she said.

Other key logistic platforms for the company in the future include a deal with LOGOS last year that established two ventures for Singapore and Indonesia with Ivanhoé Cambridge and Canada Pension Plan Investment Board as equal partners for their respective investments in modern logistics properties.

The company also has a deal with LOGOS for expansion into India with QuadReal Property Group and logistic deals in pace for both China and Australia.

Commenting on Palladitcheff's appointment, Heather Kirk, managing director of equity research at BMO Capital Markets, said, "I think it is a major accomplishment. There are efforts being made to get more (women into senior roles) and I think that is good. But it has to not be done to just check boxes. You want diversity of thought and it’s not just about gender but that’s a big part of it.”

A report out of the United States this week by Wells Fargo found that from 2006-2017, looking at 165 equity REITs, companies that exceeded the average of 15.5 percent of women on boards achieved higher average prices and total returns over the period.

The percentage of REIT women on boards has jumped from 8.5 percent to 15.5 percent during that period for US REITs, but that still lags behind the average 22 percent representation for S&P 500.

“A lot has changed, but in some ways nothing has changed,” said Kirk, whose 21-year career also spans investment banking. “When I started in the business, there were no women at all, in any C-suite at all. Some of the overt things happening that were unacceptable are not happening. But there are is still a lot of progress to be made. Real estate has a lot of the same issues as banking.”

Synthia Kloot, senior vice-president, operations for Canadian brokerages for Colliers, said more than half of the 170 employees that fall under her are women. She deals with deal administration, marketing, research and broker and advisor support.

“In the eight years I have been at Colliers, I have seen an acknowledgment of the challenge in the demographics of our industry,” said Kloot, noting the real estate firm has developed a program to attract diverse talent but also offers more support for new brokers from diverse backgrounds. “We are working with university in their real estate programs. We are looking to see how we can attract more women to sales roles. We also have a scouts actively looking for candidates in producing roles, not just recruiters.”

Garry Marr, Toronto Market Reporter  CoStar Group   
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