The Canada Pension Plan Investment Board is making a second contribution to a real estate joint venture expanding its industrial warehouse portfolio in Korea’s largest metropolitan areas.
In 2020, the CPPIB made an initial contribution of US$450 million to the joint venture, which was launched by ESR Cayman, a real estate investment firm. The joint venture was also backed by a third partner, the Algemene Pensioen Groep.
About 80 per cent of the joint venture’s initial US$1 billion investment equity has been allocated to develop about 12 hectares of logistics warehouse space. It followed an earlier joint venture, which had an initial investment allocation of US$1.15 billion, backed by all three organizations.
In a press release, Gilles Chow, managing director and head of North Asian real estate at the CPPIB, said the upsizing of the fund is part of a strategy to invest in the Korean e-commerce market. “Korea is one of the most sophisticated internet and e-commerce markets globally. We continue to see strong demand for quality logistics assets in the country. We are delighted to expand our successful partnership with APG and ESR to further capitalize on opportunities in the sector, which we believe will deliver steady, long-term returns for the CPP fund.”
In other news, Ivanhoé Cambridge, the real estate arm of the Caisse de dépôt et placement du Québec, is part of a real estate joint venture developing multifamily homes in São Paulo, Brazil.
Alongside Hines, a global real estate developer, the institutional investor will focus on projects located close to public transportation services, employment hubs, shopping malls and entertainment centres. Its homes will provide tenants with access to amenities including fitness facilities and pools and modular co-working spaces. It will have an initial investment budget of R750 million ($182 million).
In a press release, Adriano Mantesso, managing director and head of Latin America at Ivanhoé Cambridge, said the decision to join the joint venture was rooted in the organization’s belief in the global residential rental market. “We are very excited to enter the multifamily rental market in São Paulo together with Hines as first movers in the institutionalization of the sector in Brazil.”