Clarion, Equity Partner Invest $100M in 1.4 MSF Sao Paulo Industrial Project
- Jan 05, 2012
January 5, 2012
By Nicholas Ziegler, News Editor
Looking to capitalize on what will certainly be a growing economy in the next few years, Clarion Partners has acquired 78 acres of land in a northwest suburb of Sao Paulo. The company intends to develop and lease a Class A industrial facility that will eventually include 1.4 million square feet of space.
The project, slated to be a joint venture between Clarion and one of the firm’s clients, already includes a $100 million equity investment. As managing partner of the venture, Clarion has already forged a relationship with DHL Supply Chain – a company that has been a part of the Brazilian industrial market for more than a decade.
“Brazil is vibrant and growing, supported by powerful underlying fundamentals,” Jeb Belford, a managing director at Clarion, said. “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.”
With major events on the country’s horizon, including the 2014 World Cup and the 2016 Olympics, Brazil is likely on the cusp of a boom period. Services firm CBRE Group Inc., in a December 2011 report, noted that industrial rents across the globe will continue to rise this year, especially calling out the São Paulo region. The city’s average asking rents for prime industrial space – which is exactly what Clarion intends to build – is the fourth-highest worldwide (exclusive of the United States), surpassed only by Tokyo, London and Singapore. Currently, the average sits at $13.98 per square foot.
Construction on the project began last month, and is slated to complete in mid-2012. DHL Supply Chain will lease approximately half of the first completed building, as well as “substantial portions of buildings two and three for itself and its clients.” The additional buildings are expected to be complete in 2013 and 2014.