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GLP’s Brazil platform grows to $3.7bn with CPPIB tie-up

 The Singapore-based logistics developer and investment manager has formed a new joint venture and also raised additional capital for its existing development platform in Brazil.

Global Logistic Properties (GLP), the Singapore-listed developer and fund manager, has formed a $1.1 billion joint venture partnership to invest in logistics assets in Brazil called GLP Brazil Income Partners (GLP BIP) II. In addition, Brazil’s largest logistics services provider has also raised an additional $400 million for an existing development joint venture in the country, GLP Brazil Development Partners (GLP BDP) I.

Following the two announcements, GLP’s total fund management platform in the Latin American country now stands at US$3.7 billion in equity. 

“Today’s announcement represents an important milestone in the continued growth of GLP’s best-in-class fund management platform in Brazil,” said Mauro Dias, president of GLP in Brazil.

GLP holds a 40 percent stake in GLP BIP II with Canada Pension Plan Investment Board (CPPIB) investing R$507 million ($201.10 million; €158.21 million) in equity for a 30 percent ownership. The remainder has been invested by a North American institutional investor, which GLP did not name.

The firm also said that a $1.1 billion portfolio of 32 industrial assets that GLP acquired from its nearest rival in Brazil, BR Properties, earlier this year in March has been transferred to the platform. Spread over 9.6 million square feet, the logistics assets are mainly located in Sao Paulo and Rio de Janeiro. 

Of the $400 million of fresh capital injected into GLP BDP I, meanwhile, CPPIB put in R$231 million of equity. GIC Private, the sovereign wealth fund, is an existing in investor in the vehicle. The total committed equity in the partnership between GLP, CPPIB and GIC Private is now at $1.5 billion. 

That capital will be used to acquire a land parcel in Rio de Janeiro, spread over 3.8 million square feet, the firm said in a statement.

On the acquisition, Dias said: “We have capitalized on market conditions to acquire BDPI’s first development site in Rio de Janeiro, one of Brazil’s best logistics markets. Our local team did an excellent job in securing an exceptional site of considerable scale. We believe Brazil will return to a long term growth trajectory and look forward to building a sustainable, long-term business there.”

Much of GLP’s logistics operations are focused in China and Brazil. After a string of announcements in China in the last two months, the firm has now set its sights on expanding its portfolio in Brazil.

The GLP BDP I partnership was launched in November 2012 through the purchase of six industrial development projects from Sao Paulo-based fund manager Prosperitas for $464 million. GLP holds 40 percent of the venture while CPPIB and GIC own 39.6 percent and 20.4 percent respectively.

The two institutional investors together with China Investment Corporation also teamed up with GLP the same year to form GLP Brazil Income Partners I, acquiring 34 stabilized assets and one development project for $1.1 billion. 

The total assets currently under GLP’s fund management platform in the country amount to $12.6 billion.