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GLP’s Brazil development platform grows to $1.1bn

CPPIB and GIC have contributed an additional $230 million to the venture for further development in the Latin American nation. 

Global Logistic Properties (GLP) has raised R$538 million ($230 million) for its Brazil-focused development joint venture, GLP Brazil Development Partners (BDP) I. Existing investors the Canada Pension Plan Investment Board (CPPIB) and the GIC Private Limited made the follow-on commitments, bringing the total equity raised for the venture to $700 million. With leverage, the total investment capacity of the platform is now $1.1 billion.

The additional capital will go towards a number of value-added initiatives, including adding more leasable area to existing development sites; investing in building innovations to increase cost and service efficiencies; and implementation of Leadership in Energy and Environmental Design (LEED) guidelines to improve the energy and environmental performance of properties.

“Demand for modern logistics facilities remains strong in Brazil, underpinned by a growing consumer market and a continued drive to improve supply chain efficiency,” said Mauro Dias, president of GLP Brazil, in a statement. “Our Brazil portfolio provides considerable opportunities for growth, and we will look to expand organically in key markets, particularly São Paulo and Rio de Janeiro.”

BDP I was first formed in November 2012, with the acquisition of a portfolio of six development projects in Brazil from local real estate fund manager HSI, then known as Hemisferio Sul Investimentos. The purchase was part of a larger transaction that also involved the acquisition of a stabilized portfolio of 35 logistics assets. In total, the properties represented the largest logistics portfolio in Brazil, which gave the Singapore-based logistics provider and its investors immediate dominance in the country’s industrial real estate market.

To date, BDP I has invested $600 million in development projects in Brazil and has committed an additional $500 million for further developments. GLP currently owns 40 percent of the venture, while CPPIB and GIC hold 39.6 percent and 20.4 percent, respectively. The logistics firm’s stake in the venture has decreased slightly from 41.3 percent at the formation of the partnership, while GIC’s has risen from an initial 19.1 percent.