CPPIB chief executive officer Mark Wiseman. (Handout)The Canadian Press
The Canada Pension Plan Investment Board is extending its involvement in the Brazilian real estate market with a $343-million (U.S.) investment in joint partnerships to acquire two portfolios in the fast-growing South American country.
In the first joint venture, CPPIB said it has signed an agreement with Global Logistic Properties (GLP and the Government of Singapore Investment Corp. (GIC) to acquire a portfolio of five development projects in Brazil. CPPIB will own a 39.6-per-cent interest while GLP and GIC will own 41.3 per cent and 19.1 per cent, respectively.
In the second joint venture, CPPIB will partner with GLP, GIC and the China Investment Corp. (CIC) for the acquisition of a portfolio of 35 logistic assets. CPPIB will own 11.6 per cent of the venture, GLP and CIC will each own 34.2 per cent and GIC will hold a 20 per cent interest.
CPIBB and other Canadian pension fund managers and real estate companies – notably the Caisse de dépôt et placement du Québec – have over the past several years been investing billions of dollars in Brazil real estate, where there is much room for growth and professional management of a fragmented real estate industry.
"Our real estate portfolio in Brazil now includes interests in 56 retail, office and logistics properties including assets currently under development, which, when completed, will total more than 35 million square feet of leasable area," Peter Ballon, head of CPPIB's real estate investments for the Americas, said in a news release Wednesday.
"We look forward to partnering once again alongside GLP, a well-aligned partner and one of the largest global logistics owners and developers in the world."
The first portfolio – known as the Development Joint Venture – consists of five development sites with total gross leasable area of over 8 million square feet. Most of the sites are in the state of Sao Paulo, near key industrial and logistic hubs with direct access to transportation nodes, CPPIB said.
The second portfolio – the Stabilized Joint Venture – is made up of 34 fully leased assets primarily located in the southeast region of Brazil and one strategically located development site. The portfolio has a total gross leasable area of over 13.7 million square feet with a diverse tenant profile, said the fund.
The deal for the two joint ventures is set to close next month.
CPPIB is the management firm that invests money for the Canada Pension Plan on behalf of 18 million Canadians. Its portfolios include public and private equity, real estate, infrastructure and fixed income instruments.
At Sept. 30, 2012, the CPP Fund had $170.1-billion (Canadian) under management, of which $18-billion is in real estate investments.
Bertrand Marotte