Canada Pension Plan investment manager partners with real estate developer
The Canada Pension Plan is expected to receive a solid return on a new investment to build condos in Brazil’s largest city.
CPP Investments has announced an equal joint venture agreement with the South American country’s largest real estate developer, Cyrela Realty Brazil, to build the homes in São Paulo. The JV’s investment target is 1.7 billion reais (C$400 million) with the targeted sales of 6 billion reais ($1.4 billion) over the next few years.
"The residential market in São Paulo has strong fundamentals, supported by favorable demographics, low unemployment level and resilient household income growth in the city," said Ricardo Szlejf, managing director, head of Real Assets, Latin America, for CPP Investments. "We are pleased to expand our long-term partnership with Cyrela, a premier real estate developer in Brazil, to develop high-quality residential projects that we believe will deliver strong, risk-adjusted returns to CPP contributors and beneficiaries."
The investment vehicle will be managed by Cyrela’s fund manager Cy.Capital and builds on an existing five year relationship between CPP Investments and Cyrela which also includes a joint venture with the real estate firm and Greystar to develop multifamily properties in São Paulo.
"We are proud to count CPP Investments as one of our key investment partners and are excited about the opportunity to further expand what has been a very productive working relationship," said Gustavo Vaz, CEO of Cy.Capital.
This week CPP Investments has announced the sale of its entire 15.75% stake in US power producer Calpine Corporation to Constellation Energy which should generate approximately US$700m in cash and US$1.9bn in Constellation stock for the Canada Pension Plan’s investment manager. Its also expected to generate approximately US$2.2bn in net proceeds from its investment in the Goodman North American Partnership (GNAP).
