CPPIB enters joint ventures to expand Brazilian logistics portfolio by $343m
GLOBAL – The Canada Pension Plan Investment Board (CPPIB) has signed an agreement to grow its logistics real estate portfolio in Brazil through a joint venture with Singapore-based Global Logistic Properties.
The agreement involves the joint acquisition of two logistics portfolios in Brazil.
The pension fund's total commitment will be $343m (€270m), of which $200m will be funded at closing. This is anticipated to happen sometime next month.
Peter Ballon, head of real estate investments for the Americas at CPPIB, said: "This investment will significantly expand our logistics portfolio in Brazil and represents a rare opportunity to invest in a sizeable portfolio of high-quality development and logistic assets."
The JV is split into two parts. In the Development Joint Venture, CPPIB will partner with GLP and the Government of Singapore Investment Corporation to acquire a portfolio of five development projects.
One of these projects will include the future home for a warehouse/distribution operation for General Motors.
The ownership split in this JV is 39.6% to CPPIB, 41.3% to GLP and 19.1% to GIC.
The developments will include projects with a total square footage of more than 8m square feet at completion.
They are located in the State of Sao Paulo area of Brazil.
"We like development projects in Brazil because there currently aren't a great deal of high-quality existing properties," Ballon said. "There is tenant demand for new state-of-the-art buildings that companies could more into."
The other venture is called the Stabilized Joint Venture, involving the purchase of a portfolio of 35 logistics assets located primarily in the Southeast region of Brazil.
There are a total of four partners in this deal. The ownership stakes are 11.6% to CPPIB, 20% to GIC and 34.2% each to the GLP and the Chinese Investment Corporation.
Jeffrey Schwartz, deputy chairman at GLP, said: "We are delighted to be building on our strong relationship with CPPIB, one of the leading institutional investors.
"We look forward to partnering alongside them in the two joint ventures, which give us a market-leading position in Brazil, as well as a strong platform for future growth in the country."
CPPIB now owns interests in a total of 56 retail, office and logistics properties in Brazil.