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Equity International targets Brazil logistics

Sam Zell’s private equity real estate firm has debuted its first investment in the Brazilian logistics sector with a $100m investment in São Paulo-based AGV Logística.

Chicago-based Equity International has invested $100 million (€67 million) in São Paulo-based AGV Logística, a privately held logistics company.

AGV currently operates 30 facilities in 11 states across Brazil, totaling 170,000 square meters of dry storage and 150,000 cubic meters of cold storage. Last year, AGV opened the largest and most modern warehouse in Latin America, according to EI, located in Vinhedo, São Paulo. The built-to-suit facility, owned by BRACOR – a private real estate company affiliated with Equity International – includes storage zones and office space that houses AGV’s headquarters.

The investment represented a “strategic extension” for the firm’s investments in Brazil, Equity International chief executive officer, Gary Garrabrant, said in a statement. The firm now counts four portfolio companies in the country with its latest investment.

Ira Chaplik, chief operating officer for Equity International, and Thomas McDonald, chief strategic officer, are joining AGV’s board of directors.

EI has been a large investor in Latin America, earlier this year selling its remaining stake in Mexico's largest homebuilder, Homex, six years after first investing in the company.

Logistics is a growing area for real estate investors, with investment in the Japanese market in particular expected to triple over the next few years, according to LaSalle Investment Management executive, Yosuke Yoshikawa.

Yoshikawa said investments in warehouses, distribution centers, ports and other logistics properties could grow to three times its current size, according to a Reuters report yesterday, citing Yoshikawa's comments to a Tokyo seminar. Yoshikawa said logistics investments could account for more than 10 percent of total J-REIT investment in the near future, up from its current 3.8 percent.

“Logistics property investment is still immature here…But considering its big and established presence in Europe, especially in Britain, and the relative strength of the economic slowdown, logistics real estate investment has a big growth potential,” he said.