Canada Pension Plan Investment Board (CPP Investments) has entered a joint venture with Cyrela Brazil Realty (Cyrela), Brazil’s largest residential real estate developer.

The agreement targets the development of residential condominiums in São Paulo, Brazil’s largest city, with Cyrela’s fund management subsidiary, Cy.Capital, serving as the manager of the investment vehicle.

The partnership has established an investment target of $400m, split equally between CPP Investments and Cyrela. The venture aims to deliver over $1.44bn in potential sales value in the coming years.

Ricardo Szlejf, managing director, head of Real Assets, Latin America, for CPP Investments, highlighted São Paulo’s robust real estate market.

“The residential market in São Paulo has strong fundamentals, supported by favourable demographics, low unemployment level and resilient household income growth in the city,” he said.

“We are pleased to expand our long-term partnership with Cyrela, a premier real estate developer in Brazil, to develop high-quality residential projects that we believe will deliver strong, risk-adjusted returns to CPP contributors and beneficiaries.”

The announcement builds on a successful relationship between CPP Investments and Cyrela, which began in 2019. The collaboration includes a joint venture with Cyrela and Greystar for developing multifamily properties in São Paulo.

Gustavo Vaz, CEO of Cy.Capital, expressed enthusiasm for the extended partnership, stating, “We are proud to count CPP Investments as one of our key investment partners and are excited about the opportunity to further expand what has been a very productive working relationship.”