The Canada Pension Plan Investment Board has agreed to sell part of its interest in a South Korean real estate development joint-venture for US245M in net proceeds.

The agreement involves the restructuring and sale of a 21% stake in the Kendall Square Development Venture (KDV I) established in 2015. The JV develops logistics assets in strategic locations across South Korea. The partners include Dutch pension fund manager APG and ESR Group, a Hong Kong-headquartered logistics real estate investment, development and management company.

CPPIB initially invested US$175 million in KDV I in 2015 and made subsequent expansions in 2018 and 2019.

Following the divestment, CPPIB will retain a 24% interest in a newly established open-ended logistics core fund, housing KDV I’s stabilized assets, said the Canadian pension fund manager in a news release.

“Korea is one of the most developed e-commerce markets in Asia with sustained demand for quality logistics facilities,” said Gilles Chow, CPPIB’s head of real estate for North Asia. “Through our longstanding partnership with ESR and APG, we have been able to capture opportunities in this space. The partial sale of our stake in KDV I allows us to monetize the investment to deliver returns to the CPP Fund while remaining committed to this important sector.”

At year-end 2023, the CPP Fund totalled $590.8 billion.

Image: CNW Group/CPPIB