Return to search

CPPIB invests additional $138m in Japan JV

A day after announcing an expansion of its real estate portfolio in Brazil, the Canadian public sector pension has committed $138 million more in equity to its Japan joint venture with GLP.

The Canada Pension Plan Investment Board (CPPIB) has allocated an additional ¥15 billion ($138.69 million; €108.95 million) in equity to its industrial joint venture in Japan with Global Logistic Properties (GLP), the Singapore-listed logistics real estate developer and investment manager.

The news comes just a day after the public sector pension announced additional equity commitments totaling R$738 million ($299.81million; €235.40 million) to its multiple partnerships with GLP in Brazil.

Following the fresh capital injection, CPPIB’s total commitment to the 50:50 joint venture aimed at funding logistics’ developments in Tokyo and Osaka now stands at ¥65 billion.

With GLP contributing the same amount, the total equity committed to the JV is ¥130 billion. Assuming leverage on a 50 percent loan to value basis, the investment capacity of the venture is $2.2 billion.

GLP announced the new commitments today, adding further that the investment identification period has been reset for another three years from the signing date. “We are pleased to grow further our fund management platform and strengthen our long term partnership with CPPIB,” Yoshiyuki Chosa, president of GLP Japan said in a statement. “GLP Japan development venture has consistently outperformed over the past three years with leasing progressing ahead of schedule and achieve higher rents than budgeted.”

The joint venture partnership was first setup in September 2011 when both partners committed an initial capital of ¥21 billion each. In February last year, they both put in additional ¥29 billion each.

The joint venture has committed to projects in various stages of development in Japan with a combined value of $1.4 billion. The most recent is the development of an 840,000 square feet multi-tenant logistics facility in Okayama in western Japan, with an estimated development cost of ¥9.6 billion.

Strengthening its partnership with GLP, the largest logistics services provider in China and Brazil, CPPIB has also increased its capital commitments in Brazil. In a statement released yesterday, it allocated R$507 million in a new $1.1 billion joint venture partnership with GLP and another North American institutional investor to invest in logistics assets in the Latin American country. In addition, it also contributed an additional R$231 million of equity to an existing development partnership called GLP Brazil Development Partners.

CBBIP is one of the world’s biggest pension funds, with more than $203 billion of assets under management. Of this, $22 billion represents real estate investments.