Canadian Pension Plan Strikes 2 More Real Estate Deals

January was a busy month for the Canada Pension Plan, which signed two real estate deals at the end of the month, on top of others announced by the pension giant earlier this year. The two new deals involve joint ventures in Brazil and South Korea.

CPPIB signed a 50-50 joint venture agreement with Brazil’s largest residential real estate developer, Cyrela Brazil Realty. In São Paulo, the two will invest 1.7 billion reais ($287.4 million) to build residential condominiums, which they expect to bring in more than 6 billion reais in potential sales over the next several years. Cy.Capital, Cyrela’s fund management subsidiary, will manage the investment vehicle.

“The residential market in São Paulo has strong fundamentals, supported by favorable demographics, [a] low unemployment level and resilient household income growth in the city,” Ricardo Szlejf, CPP Investments’ head of real assets for Latin America, said in a statement.

The pension fund also announced a joint venture worth 500 billion South Korean won ($350 million) with South Korean rental housing provider MGRV Inc. to develop rental housing projects. CPPIB, which announced the deal as its first direct investment in Korea’s residential sector, will own 95% of the operation, with MGRV owing the remaining 5%. According to the companies, they plan to develop properties in the Korean capital, Seoul, and target areas near major business districts and universities. As part of the joint venture, CPPIB has committed to invest up to 133 billion South Korean won ($91.14 million) to seed projects in Seoul.

“This joint venture offers an excellent opportunity to enter the residential sector in Korea and meet the strong demand for high-quality rental housing in the greater Seoul area, where half of Korea’s population resides,” Sophie van Oosterom, CPPIB’s head of real estate, said in a statement.

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The deals in Brazil and Korea are in addition to a joint venture CPPIB formed with real estate firm Bridge Industrial and a deal announced in early January to sell its 49% stake in four real estate joint venture projects with Chinese real estate firm Longfor Group to an affiliate of Dajia Insurance Group. The pension fund estimated that the net proceeds from the sale would be approximately C$235 million ($163.3 million) before closing adjustments.

In addition to the real estate deals during the month, CPPIB also sold its 15.75% stake in U.S. power producer Calpine to Constellation Energy for net proceeds of approximately $700 million in cash and $1.9 billion in Constellation stock. The pension fund announced in 2017 an initial investment of $750 million in Calpine that it made along with a consortium of investors. The sale is expected to close in the second half of 2025.

“We are pleased by the success of our investment in Calpine and view this transaction as an excellent opportunity to realize strong returns for the CPP Fund,” Bill Rogers, CPPIB’s head of sustainable energies, said in a statement.