Narayan AmmachchiThe Canada Pension Plan Investment Board (CPPIB) has announced plans to invest US$396 million in a range of Brazilian industries including real estate and logistics.
The pension fund, which opened an office in Sao Paulo earlier this year, says it foresees huge prospects for the real estate market in Brazil, which is going to host the 2016 Olympic Games.
The latest round of investments in Rio de Janeiro and Sao Paulo pushes CPPIB’s total investment in Brazilian real estate to roughly $1.7 billion. In all, CPPIB’s real estate portfolio in Brazil includes more than 100 properties.
In addition, the Canadian fund has set aside funds to purchase stakes in development projects in the logistics and retailing industries.
Rising demand for commercial office space in Brazil’s major metropolitan cities is what persuaded the Canadian firm to expand its operations. From its office in Brazil, CPPIB also oversees its investments in other Latin American countries, including Chile, Colombia, Mexico and Peru.
One of the world’s biggest pension funds, CPPIB has more than $212 billion in assets under management.
“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,” said Peter Ballon, Managing Director & Head of Real Estate Investments – Americas.
Its latest investments include $94 million in a joint venture with Global Logistic Properties to invest in a portfolio of 32 logistics properties. CPPIB will have a 30% ownership stake in the joint venture.
The Canadian firm said it will use additional capital to acquire land parcel in Rio de Janeiro. CPPIB also pledged to spend $65 million to buy a 25% stake in a São Paulo logistics project alongside Cyrela Commercial Properties SA.
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