Brazil Developer Draws Heavyweight Investors

Cyrela Commercial Properties (CCP), the publicly listed Brazilian developer of commercial real estate, has raised $300m with two large institutional investors to form a new vehicle that has characteristics of a real estate fund and a joint venture. CCP is contributing $100m to the effort, leaving it today with a $400m pool of new capital to be used in expanding and diversifying its portfolio. Canada Pension Plan Investment Board (CPPIB) and Singaporean sovereign wealth fund GIC are each contributing $150m in what the market has interpreted as a significant demonstration of confidence in Brazil and its commercial property market. The two also have the option of increasing their individual commitments to $250m, which would bring the pool to $600m, according to a person with knowledge of the trade. “This shows that funds are starting to put their money to work and they’re choosing to do it in Brazil first,” Bruno Laskowsky, CCP’s CEO, tells LatinFinance. The executive says he believes this is the first LatAm real estate investment for CPPIB, whose plan totals $105bn. GIC, which manages over $100bn, already has a longer track record of investing in Brazilian real estate. The fact that CCP is publicly listed provides the investors with some of the assurances they look for when committing long term capital, says Laskowsky, pointing to transparency, accountability and corporate governance as chief investor concerns. The general quality of the assets CCP targets, which tend to fall in the so-called AAA category, is also a draw, says the CEO. US-listed CCP ADRs closed up 9% at $20.49, while its Bovespa-listed shares were up 2% at BRL10.20.