CPPIB forms new $400m Brazilian office JV

The Canadian pension plan and Brazilian real estate company have closed on a portfolio exchange transaction in which CPPIB sold its stake in an existing logistics JV.

Canada Pension Plan Investment Board and Cyrela Commercial Properties have committed up to $400 million to a new joint venture focusing on office investments in Brazil, the groups announced last week.

The joint venture was part of a portfolio exchange transaction, which Cyrela previously announced in January, where CPPIB purchased a 33 percent stake in Cyrela’s Brazilian office portfolio, and the commercial real estate company bought out the Canadian pension plan’s 50 percent interest in their existing logistics partnership.

Cyrela’s office portfolio is one of the largest in the Latin American country, with 12 Class A properties located primarily in the São Paulo office district of Faria Lima. The office properties, which total approximately 975,000 square feet of leasable space, are more than 90 percent leased and have anchor tenants in the financial and legal services industry. Cyrela will continue to manage the properties.

“This transaction represents a compelling opportunity to gain exposure to the Brazilian office sector, further diversifying our portfolio,” said Hilary Spann, head of Americas real estate at CPPIB. “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. We look forward to working alongside CCP, a longstanding partner, as we seek more acquisitions in this sector.”

Added Pedro Daltro, Cyrela’s chief executive: “We see this as an important step to further expand our partnership with CPPIB, a well-aligned and well-capitalized 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.”

Separately, Cyrela sold CPPIB’s 50 percent stake in the warehouse portfolio to Prologis. The industrial real estate company announced last week that it also had acquired Cyrela’s 25 percent interest in the logistics portfolio, giving it 100 percent ownership of Prologis CCP. Both the CPPIB and Prologis transactions were negotiated concurrently, as the completion of each transaction was a condition for the completion of the other.