Canada Pension Plan Investment Board (CPPIB) is increasing its exposure to the Brazilian office market through a “portfolio exchange” with Cyrela Commercial Properties (CCP).
CPPIB has acquired a 33% interest in CCP’s office portfolio in Brazil while selling its 50% equity stake in the existing logistics joint venture, CCP Logística Empreendimentos Imobiliários.
The pension fund began investing in Brazilian logistics with CCP in 2014.
The two parties have also committed a combined US$400m (€342m) for a new joint venture that will make additional investments in top-tier office properties in Brazil.
The CCP office portfolio is among the largest in Brazil comprising 12 class-A assets encompassing 90,500sqm of leasable space.
Predominantly located in the prime Faria Lima office district of São Paulo, the properties are more than 90% leased and anchored by financial and legal-services tenants.
Hilary Spann, managing director and head of Americas for real estate investments at CPPIB, said: “This transaction represents a compelling opportunity to gain exposure to the Brazilian office sector, further diversifying our portfolio.
“We are able to build immediate scale through this investment in one of Brazil’s most resilient office portfolios, strategically located in a prime office market in São Paulo.”
CPPIB said CCP’s office portfolio has historically outperformed the wider class-A Brazilian office market, maintaining high occupancy levels particularly in properties located within the supply-constrained Faria Lima market. CCP will continue to manage and operate the properties.
Pedro Daltro, CEO of CCP, said: “We see this as an important step to further expand our partnership with CPPIB, a well-aligned and well capitalised partner.
“Our new joint venture will enable us to build an even bigger footprint in the Brazilian office market, complementing our existing office portfolio that has proven to be resilient throughout market cycles with a highly attractive tenant base.”