CPPIB Forms €2 Billion European Logistics Partnership

Canadian pension to contribute €450 million of equity.

The C$368.3 billion ($278.2 billion) Canada Pension Plan Investment Board (CPPIB) is launching a partnership with logistics firm GLP and QuadReal Property Group that will focus on developing modern logistics facilities in Germany, France, Italy, Spain, Netherlands, and Belgium.

The partnership, known as GLP Continental Europe Development Partners I (GLP CDP I), will initially be funded with €1 billion ($1.1 billion) in equity from the three backers. CPPIB, through its wholly owned subsidiary, CPP Investment Board Europe S.a.r.l., will contribute €450 million of equity to GLP CDP I, while GLP and QuadReal, which is owned by Canadian institutional investor British Columbia Investment Management Corp., will kick in the remainder, though it was not disclosed how much each would contribute.

“GLP CDP I is a key part of our development-led growth strategy in the logistics sector globally, and will significantly enhance our existing holdings in Continental Europe,” Andrea Orlandi, CPPIB’s head of real estate investments in Europe, said in a release. “We expect GLP CDP I to grow quickly in scale and perform well over the long term given rising e-commerce sales and consumer demand for ever-shorter delivery times in Europe.”

The companies said GLP CDP I is expected to reach €2 billion of assets under management (AUM) when fully invested and is intended to help capture significant growth opportunities in Europe.

“Research and experience inform our high conviction about developing logistics facilities in select, target markets that will create a resilient industrial portfolio,” said Jay Kwan, head of Europe for QuadReal.

The partnership is the latest investment in the logistics sector for CPPIB. In August, it boosted its stake in a partnership that invests in logistics facilities in China by more than 50% to $5 billion. And earlier that month, CPPIB announced that it had agreed to partner with logistics real estate developer ESR and its Seoul-based subsidiary Kendall Square Asset Management to invest up to $500 million in a newly established investment vehicle targeting modern logistics facilities in Korea.

In July,CPPIB, along with WPT Industrial Real Estate Investment Trust and Alberta Investment Management Corp., formed a joint venture to aggregate a portfolio of industrial properties in strategic US logistics markets. And in June, it announced a R$500 million ($130.6 million) equity target for a 20% stake a partnership to invest in prime logistics and industrial assets in São Paulo and Rio de Janeiro.





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