Canada Pension Plan Investment Board and Cyrela Commercial Properties SA (CCP) have completed a portfolio exchange transaction. The previously announced deal saw CPPIB acquire a 33 percent interest in CCP’s Brazilian office portfolio and CCP acquire the pension fund’s 50 percent equity stake in their existing logistics joint venture. The agreement also saw CPPIB and CPP commit up to US$400 million to a new joint venture focused on additional investments in office properties in Brazil. The properties are located primarily in São Paulo’s Faria Lima commercial district.
Canada Pension Plan Investment Board and Cyrela Commercial Properties S.A. Announce Closing of Portfolio Exchange in Brazil
CPPIB and CCP Commit US$400 Million to New Brazilian Office Joint Venture
TORONTO, ONTARIO and SAO PAULO, BRAZIL–(Marketwired – Aug. 16, 2017) –
Canada Pension Plan Investment Board and Cyrela Commercial Properties S.A. announce the closing of a portfolio exchange transaction under which CPPIB has acquired a 33% interest in CCP’s Brazil-based office portfolio and CCP has acquired CPPIB’s 50% equity stake in their existing logistics joint venture.
CPPIB and CCP commit up to US$400 million to a new joint venture to focus on further investments in top-tier office properties in Brazil.
The CCP office portfolio is one of Brazil’s largest, with 12 Class-A properties located primarily in Faria Lima, São Paulo’s prime office district.
Canada Pension Plan Investment Board (“CPPIB”) and Cyrela Commercial Properties S.A. (B3:CCPR3) (“CCP”) today announced the closing of a portfolio exchange transaction under which CPPIB has acquired a 33% interest in CCP’s office portfolio in Brazil and CCP has in turn acquired CPPIB’s 50% equity stake in their existing logistics joint venture, CCP Logística Empreendimentos Imobiliários S.A.
Further, CPPIB and CCP have jointly committed US$400 million to a newly formed joint venture that will focus on additional investments in top-tier office properties in Brazil.
The CCP office portfolio is among the largest in Brazil comprising 12 Class-A properties totalling 90,500 square metres (approximately 975,000 square feet) of leasable space. Predominantly located in São Paulo’s prime Faria Lima office district, the high-quality office properties are more than 90% leased, and anchored by a broad mix of strong tenants in financial and legal services.
“This transaction represents a compelling opportunity to gain exposure to the Brazilian office sector, further diversifying our portfolio,” said Hilary Spann, Managing Director, Head of Americas, Real Estate Investments, 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.”
CCP’s office portfolio has historically outperformed the overall Class-A Brazilian office market, maintaining high occupancy levels particularly in properties located within the supply-constrained Faria Lima market. CCP will continue to manage and operate the properties.
“We see this as an important step to further expand our partnership with CPPIB, a well-aligned and well-capitalized partner,” said Pedro Daltro, CEO of CCP. “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.”
Canada Pension Plan Investment Board (CPPIB) is a professional investment management organization that invests the funds not needed by the Canada Pension Plan (CPP) to pay current benefits on behalf of 20 million contributors and beneficiaries. In order to build a diversified portfolio of CPP assets, CPPIB invests in public equities, private equities, real estate, infrastructure and fixed income instruments. Headquartered in Toronto, with offices in Hong Kong, London, Luxembourg, Mumbai, New York City, São Paulo and Sydney, CPPIB is governed and managed independently of the Canada Pension Plan and at arm’s length from governments. At June 30, 2017, the CPP Fund totalled C$326.5 billion. For more information about CPPIB, please visit www.cppib.com or follow us on LinkedIn or Twitter.
CCP is one of Brazil’s leading companies in the development, acquisition, leasing, sale and management of commercial real estate. It focuses on Class A office buildings located in core markets, shopping malls and distribution centers, with investments in the states of São Paulo, Rio de Janeiro, Minas Gerais, Goiás, Bahia and Pará. Currently, CCP has an operating portfolio of 480,000 square meters of leasable area. With over 16 years of experience in the sector, the Company is the result of the spin-off of Cyrela Brazil Realty’s commercial property activities in 2007. The Company is listed in the Novo Mercado Special Corporate Governance Segment of the São Paulo Stock Exchange, trading under the ticker CCPR3.
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Photo courtesy of Cyrela Commercial Properties SA