Cadillac Fairview makes first Colombia investment

The real estate arm of the Ontario Teachers’ Pension Plan will invest $150 million in Terranum Corporate Properties, one of the portfolio companies of Equity International.

Cadillac Fairview, the real estate subsidiary of the Ontario Teachers’ Pension Plan, has made an entity-level investment in Terranum Corporate Properties, a Bogota-based real estate developer focused on office and industrial properties in Colombia and the Andean regions of Central and South America.

Cadillac Fairview’s $150 million commitment represents its debut investment in the Latin American nation and makes it one of the first Canadian pension plans to invest in Colombian real estate. The Public Sector Pension Investment Board also has made real estate investments in the country, including one in local homebuilder Amarillo.

“Cadillac Fairview recognizes the macroeconomic growth and stability of Colombia, as well as Terranum Corporate Properties’ leadership in property development,” said John Sullivan, president and chief executive of Cadillac Fairview, in a statement. “In addition to our capital investment, we are pleased to share our international expertise and experience in property development and management with Terranum through this partnership.”    
Cadillac Fairview will become the second partner for Terranum Corporate Properties, which is a business unit of Terranum Group. In August 2011, Chicago-based Equity International (EI) announced a $75 million investment in Terranum Corporate Properties in its first investment in Colombia.

Since that investment, Terranum Corporate has grown from having an eight-person team and 10,000 square meters under development to a staff of 47 and 150,000 square meters under development, according to Brian Finerty, co-head of EI’s global investments team. The developer also has become more “institutionalized,” having installed an investment committee and standardized reporting procedures, among other measures, he noted.

Cadillac Fairview’s new investment will dilute EI’s original 35 percent stake in Terranum. Both firms now will have minority interests and equal governance in the company, although Finerty declined to provide further specifics.

The new investment will be used to help to fund Terranum Corporate Properties’ existing projects in Colombia, including Connecta, a commercial mixed-use development in Bogota; ZOL Funza, a major logistics facility in the country; and an industrial park located in the free zone of Gachancipá for Portuguese company Prebuild. Capital also may be directed to a pipeline of potential investments in Barranquilla, Medellín and Cali.

“We will see the company deploy this capital quickly,” said Finerty, who expects Cadillac Fairview’s investment to be fully utilized by the first quarter of 2015.