On Tuesday, the Canada Pension Plan Investment Board (CPP Investments), which manages around C$456.7 billion in pension assets on behalf of the 20 million contributors and beneficiaries of the Canada Pension Plan, announced that it is part of an investment consortium including Greystar Real Estate Partners and Cyrela Brazil that will partner with Brazilian real estate developer SKR to develop, own and operate a purpose-built multifamily rental project in the Pinheiros/Rebouças district of São Paulo.
With completion expected in 2023, CPP says the asset will be a new and centrally located high-rise optimized for rental operations and a signature community lifestyle.
The project will add an iconic building design to the São Paulo skyline. The property was designed by Brazilian architect Angelo Bucci of sustainable architecture firm SPBR Arquitetos, with inspiration from local materials and architectural features such as exposed concrete, natural hardwoods and Portuguese mosaic stones.
The 220-unit building will have entrances facing the Avenida Rebouças commercial street and the more private Rua dos Pinheiros, and will feature retail shops, common areas and resident lounges designed to integrate with Greystar’s operations and provide tenants with a “premier lifestyle experience.” Some of the project’s notable amenity spaces will include a state-of-the-art gym, co-working lounges, a dedicated podcast room, rooftop pool with a bar and lounge, and a world-class restaurant with easy and convenient access for residents.
A first for Brazil
The partnership will be one of the first-ever institutionally owned and operated multifamily real estate investment platforms in Brazil, which is benefiting from multiple consumer behavior and demographic trends, along with a low interest rate environment that CPP says will favor this Brazilian asset for many years to come.
“CPP Investments continues to see increasing demand in the rental multifamily sector in Brazil, which will particularly benefit developers of modern, high-quality residential space,” said Hilary Spann, Managing Director, Head of Real Estate Americas, CPP Investments. “We are pleased to venture with SKR on this project and look forward to expanding our purpose-built multifamily portfolio in Brazil.”
“It’s an opportunity and privilege to be part of a venture with global partners such as Cyrela, Greystar and CPP Investments, recognized experts in developing and managing institutionally owned rental residential buildings,” said SKR founder and CEO Silvio Kozuchowicz. “I am certain that this will be the start of a solid partnership that will promote the development of several projects catered to this new growing asset class and demand from the Brazilian residential market, which is in constant transformation. A venture of this magnitude consolidates our position and relevance within the Brazilian competitive landscape.”
Hailing Kozuchowicz as “a true visionary” in the development of Brazil’s residential real estate market, Greystar Managing Director of South America Tom Livelli said his firm “could not be more pleased” in announcing SKR’s role in the partnership between Greystar, CPP and Cyrela.
“SKR’s unmatched development expertise will significantly contribute to our growing portfolio of best-in-class, purpose-built and professionally managed rental residential buildings,” said Tom Livelli, Managing Director of South America for Greystar.
With 35 years in business, SKR is a real estate development and construction company focused on Brazil’s high-end property market and synonymous with the luxury real estate segment. To date, SKR has developed over 2,693 apartments and 55 buildings, or more than 600 thousand m² in commercial and residential developments. Cyrela Brazil Realty ranks among the largest residential property developers in the Brazilian real estate market overall, having built more than 56,000 homes across Brazil with another 200 construction sites open across 67 Brazilian cities.
In 2007, SKR and Cyrela established the joint venture SK Realty to explore and develop opportunities in the Sao Paulo real estate market.
Greystar-CPP venture
Greystar, headquartered in Charleston, South Carolina, is the largest operator of apartments in the United States, managing around 713,000 beds nationwide, with $37.2 billion in institutional assets under management, including more than $16 billion of assets under development. The company manages and operates real estate in 200 markets globally, with locations in the U.S., U.K., Europe, Latin America and Asia Pacific.
Greystar’s venture in Brazil may be just the first of many with Canada’s CPP. Earlier this month, Greystar announced that it and CPP have formed a new joint venture to develop Class A, mid- and high-rise multifamily real estate projects in target markets in the U.S. CPP has allocated $350 million for a 90 percent stake in the venture, while Greystar has allocated $39 million for the remaining 10 percent, and will manage and operate the portfolio.
“There is a significant undersupply of rental housing in the U.S. Despite the global pandemic and short-term economic uncertainty, there continues to be an opportunity for long-term investors to develop high-quality multifamily properties in growth markets,” CPP’s Spann said upon announcing that deal.
