CPP Investments Gets Some Liquidity from Kendall Square Investment

Posted on 02/20/2024

South Korea is one of the most developed e-commerce markets in Asia with demand for quality logistics facilities. Canada Pension Plan Investment Board (CPP Investments) announced it has agreed to a restructure and sale of a 21% partial interest in the Kendall Square Development Venture (KDV I) in South Korea. Net proceeds to CPP Investments from the sale will be approximately US$ 245 million.

KDV I is a joint venture set up in 2015 among CPP Investments, APG Asset Management, and ESR Group Limited to develop modern logistics real estate assets in prime locations within major strategic logistics hubs in South Korea. CPP Investments’ initial investment in KDV I was US$ 175 million. The joint venture was subsequently upsized in 2018 and 2019.

CPP Investments will remain an investor with a 24% stake in a newly formed open-ended logistics core fund, which will house KDV I’s stabilized assets. CPP Investments is currently partnered with ESR on two other ventures focused on the Korean logistics sector.

ESR Korea Logistics Core Fund
On February 14, 2024, ESR Group announced that its South Korean platform, ESR Kendall Square has established Korea’s first perpetual, open-ended core logistics fund. The newly-formed core fund portfolio includes seven trophy assets which are developed and managed by ESR Kendall Square. Strategically located in the Greater Seoul and Greater Busan areas, the initial seven assets, with a total Gross Floor Area of 1 million square meters, have an average occupancy of over 99%.

APG Asset Management, which oversees Stichting Pensioenfonds ABP, has committed more than US$ 400 million the ESR Korea Logistics Core Fund set up with longtime partners ESR and the Canada Pension Plan Investment Board.

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