CPPIB raises real estate commitments in Brazil to $2B with $445M new investments

TORONTO – The Canada Pension Plan Investment Board has announced a combined $445-million of investments in logistics and retail assets in Brazil in a string of moves that bring its real estate commitments in the South American giant to more than $2 billion.

“Since making our first real estate investment in Brazil in 2009, CPPIB has become one of the largest investors in the sector with ownership interests in logistics, retail, office and residential assets or developments,” Peter Ballon, managing director and head of real estate investments – Americas, said in a release Monday.

“Over the past 10 months we deepened relationships with our key partners to commit additional equity in high-quality real estate assets that are important additions to our diversified Brazilian portfolio.”

The latest investments include $226 million in a joint venture with Global Logistic Properties to invest in a portfolio of 32 logistics properties that GLP previously acquired from BR Properties S.A. CPPIB will have a 30 per cent ownership stake in the joint venture. Logistics properties include warehouses, distribution facilities and the like.

Meanwhile, the CPPIB has committed an additional $103 million to GLP Brazil Development Partners I, an existing joint venture that is owned 40 per cent by GLP, 39.6 per cent by CPPIB and 20.4 per cent by the Government of Singapore Investment Corp. The additional capital will be used to acquire a strategically positioned land parcel in Rio de Janeiro comprising 3.8 million square feet of buildable area.

It has also committed $71 million to acquire a 25 per cent interest in a new logistics development project alongside longtime partner Cyrela Commercial Properties. Called Cajamar III, the development will comprise more than 2.7 million square feet of leasable area located on the outskirts of Sao Paulo.

And the CPPIB is acquiring a 33.3 per cent interest in Santana Parque Shopping for $45 million. Aliansce Shopping Centers, an existing partner, also owns a 33.3 per cent interest in the 280,000 square foot regional shopping centre in Sao Paulo.

“Brazil remains a key market for CPPIB over the long term and we will continue to seek attractive investment opportunities through our existing partnerships with top-tier local partners while we continue to build our local presence in Sao Paulo,” Ballon said.

Canada Pension Plan Investment Board is a professional investment management organization that invests the funds not needed by the Canada Pension Plan to pay current benefits on behalf of 18 million Canadian contributors and beneficiaries.