NEW YORK--(BUSINESS WIRE)--Clarion Partners, a leading real estate investment manager, has acquired 350,000 sqm of land in a northwestern suburb of São Paulo, with plans to develop and lease a high-quality, modern, Class-A industrial warehouse facility, it was announced today. The five-year project is expected to be completed in phases and will eventually include three buildings with a total of 140,000 sqm of space. The joint venture between Clarion and a separate account client of the firm includes an initial equity investment of $100 million (US).
With more than $23 billion in assets under management for more than 200 institutional investors, Clarion Partners has been a leading real estate investment manager in the United States for more than 30 years. The company established its first office in São Paulo, Brazil in 2008 and publishes in-depth research on the country on a regular basis for the benefit of its clients. As investor interest in Brazil grows, Clarion expects to make significant additional investments over the coming years.
As managing partner of the new venture, Clarion has formed a strategic alliance with the real estate development arm of DHL Supply Chain, the global logistics company and an active participant in Brazil’s industrial market for more than a decade. The Clarion-DHL team will develop first class industrial warehouse properties in Brazil, and the new project will be its first. Clarion has a long-standing relationship in the U.S. with Exel, DHL Supply Chain’s business in North America.
Located within one of the region’s most important industrial markets, the property is well situated, with access to major highways and a suburban location that is close to the São Paulo market as well as to nearby factories and distribution centers. Multinational companies located in the area include major corporations such as Pepsi, Coca Cola, Nike, Unilever, Siemens, Avon, Penski, Kraft, HP, Samsung and Bosch.
The industrial market in Brazil generally, and São Paulo specifically, is characterized by a shortage of new, modern warehouse space that meets institutional standards. São Paulo, with one-third of the nation’s gross domestic product (GDP), is the largest industrial market, but only one-quarter of its current industrial stock is estimated to be investment grade. As a result, demand for warehousing space is strong, as evidenced by significant rent growth in the market as well as low vacancies.
Construction of the first phase of the project began in early December of 2011, with an anticipated delivery in mid-2012. DHL Supply Chain has agreed to lease approximately half of the first building on completion, and is anticipated to lease substantial portions of buildings two and three for itself and its clients. The additional buildings are to be constructed sequentially, and are expected to be completed in mid-2013 and mid-2014, respectively.
Research highlights positive trends in the market
In making the investment in Brazil, the Clarion Partners research team noted the country’s young and growing population and government support for a wide range of infrastructure projects including highways, ports, and oil exploration ports. Growth in Brazilian economy is further supported by its strong ties to diverse global trading partners, including China and other developing markets, and by its hosting role for the 2014 World Cup and the 2016 Olympics.
“Brazil is vibrant and growing, supported by powerful underlying fundamentals,” said Jeb Belford, Managing Director at Clarion Partners. “With a lack of high quality warehouse space in many parts of the country, we believe this provides an excellent opportunity to participate in the continued expansion of this increasingly important market.”
About Clarion Partners LLC
Clarion Partners has been a leading U.S. real estate investment manager for almost 30 years. Headquartered in New York the firm has offices in major markets throughout the U.S. as well as a presence in Mexico and Brazil. With more than $23 billion in total assets under management, including more than 100 million square feet of industrial space in industrial hubs across the Americas, for more than 200 institutional investors both domestic and international, Clarion Partners offers a broad range of real estate strategies across the risk/return spectrum.
More information about the firm is available at www.clarionpartners.com.
Disclaimer
Some information contained herein is derived from selected third party sources believed by Clarion Partners to be reliable, but no representation or warranty is made regarding its accuracy or completeness. Opinions and forecasts expressed reflect the current judgment of Clarion Partners’ Research and Investment Strategy Group and may change without notice. Nothing herein constitutes an offer or solicitation of any product or service to any person or in any jurisdiction where such offer or solicitation is not authorized or is prohibited by law. Past performance is not necessarily indicative of future results.