The Canada Pension Plan Investment Board (CPPIB) recently announced plans to invest around €319m in Brazil’s commercial real estate.
The move will bring CPPIB’s property commitments in Brazil to more than €1.5bn, with a portfolio of more than 100 properties in Latin America’s largest economy acquired since 2009.
Just a few months prior to the announcement, the Toronto-based pension fund opened an office in São Paulo, releasing a statement that their next round of investment activity is to include the purchase of warehouses, land and stakes in development projects in the logistics and retailing industries.
The CPPIB has been purchasing Brazilian commercial real estate over the last five years, to profit from rising demand for corporate and distribution facilities. One of the world’s biggest pension funds with more than €170bn assets under management worldwide, The Canadian giant have spent time gaining on-the-ground presence and forming business connections in Brazil.
“Brazil remains a key market for CPPIB over the long term and we will continue to seek attractive investment opportunities through our existing partnerships with top-tier local partners while we continue to build our local presence in São Paulo,” Peter Ballon, head of CPPIB’s real estate investment in the Americas said in the statement.
Latin America’s geographic location provides a strategic advantage to foreign investors in its commercial real estate. Performance in commercial real estate markets has a domino effect on residential, boosting prices as commercial activity increases, creating jobs and building prosperity.
In the aftermath of the World Cup, Brazil’s real estate sector continues to boom, particularly in the commercial property market. With commercial growth set to continue, now is an opportune time to look for investments in Brazil’s residential property market.