The Canada Pension Plan Investment Board (CPPIB) and property developer Cyrela Brazil Realty are partnering with the largest operator of apartments in the United States to build a portfolio of residential properties in Brazil.
The expanded joint venture with South Carolina-based Greystar Real Estate Partners will allow the three parties to develop, operate, and own multifamily rentals in São Paulo and continue expanding into Brazil’s burgeoning real estate market, CPPIB said Monday. Together, they plan to invest up to R$1 billion, or US$190 million, in combined equity.
“CPP Investments sees increasing demand in the rental multifamily sector in Brazil, which will particularly benefit developers of modern, high-quality residential space,” Hilary Spann, managing director and head of American real estate at CPPIB, said in a statement.
CPPIB said it will continue to hold the majority stake in the joint venture and Cyrela will hold a “significant” stake. In November, the Canadian pension portfolio said it would take an 80% position, while Cyrela would hold a 20% position.
The partners have already secured three out of four São Paulo development projects they plan to seed, which will account for about 40% of the planned US$190 million equity investment.
The investment will be one of the first institutionally owned and operated real estate platforms in São Paulo, where a growing business center is attracting new renters and consumers. “We see tremendous opportunity in Brazil,” Greystar Chairman and CEO Bob Faith said in a statement.
CPPIB is a growing investor in Latin America. The pension plan reported that it invested US$13.1 billion into the region, or about 4% of its US$333 billion portfolio, as of June. Last year, it invested $12.6 billion in the region. In 2014, CPPIB opened an office hub in São Paulo.