AMERICAS - The Canada Pension Plan Investment Board (CPPIB), investment manager of the $105bn (€73.9bn) Canada Pension Plan, has entered into a joint venture with Brazilian property developer Cyrela Commercial Properties (CPP) to invest in commercial real estate in Brazil.
The joint venture also includes GIC Real Estate, the property investment arm of the Government of Singapore, and will focus on the development, acquisition and management of "institutional-quality" properties.
CPPIB's investment will consist initially of a $150m commitment with the option to increase the sum invested to up to $250m, at the pension fund's discretion.
Property firm CPP is based in São Paulo and currently develops, owns and manages a commercial property portfolio in Brazil, which includes prime office buildings in São Paulo as well as shopping centres and industrial properties throughout the country.
"We are extremely pleased to be partnering with CCP in our first real estate joint venture in South America," said Graeme Eadie, senior vice president, real estate investments at CPPIB.
"Brazil is the leading economy in South America and represents one of the world's dominant emerging markets. The anticipated growth in the country's middle class will continue to drive demand for commercial real estate across a broad range of sectors."
The joint venture's principal strategy will be to develop and manage high-quality office buildings, shopping centres and distribution facilities in Brazil. It will also explore the acquisition of high-quality existing properties on a highly selective basis.
The value of the CPPIB real estate portfolio amounted to $6.9bn at the end of March 2009, 89% of which is invested in developed markets with the balance in emerging markets, such as Mexico, Turkey and China.