Canada's CPPIB targets India office market with $200m JV deal
Canada Pension Plan Investment Board (CPPIB) will commit $200 million to its first real estate venture in India. In partnership with the Shapoorji Pallonji Group, it will acquire income-producing office buildings in Indian cities. CPPIB has an 80% stake in the joint venture.
The Shapoorji Pallonji Group has a turnover of $2.5 billion and its business interests cover real estate development, construction (including residential, commercial, industrial and infrastructure), and infrastructure, among others. The promoters of the group are among the largest shareholders in Tata Group.
The Shapoorji Pallonji Investment Advisors team will support the CPPIB venture, according to a statement.
The investment comes as reduced demand for office space in India has lowered rents in Mumbai, New Delhi and its surrounding National Capital Region by 20-40%, according to Jones Lang LaSalle. The supply of office space is estimated to be about 40 million square feet, while demand is expected to be for 25 million square feet.
"In a long-term trend, we know there is going to be short periods of volatility. If you think about it, those cycles are very small and the overall trend is very clear. So we are not concerned," Mark Wiseman, president and chief executive officer at CPPIB, told LiveMint.
The pension fund intends to increase its exposure to India through partnerships. It will start with real estate and infrastructure, and move into private equity. CPPIB is also examining the debt capital markets and looking at publicly listed equity.
As of September 30, the pension fund had C$192.8 billion in assets, of which C$22 billion ($20.7 billion) represents real estate investments.
Other institutional investors seeking long-dated partnerships in the Indian real estate sector include GIC Private, which will be the lead investor in an Indian business real estate platform launched by Singapore-based Ascendas. The sovereign wealth fund and Temasek Holdings have also committed $200 million to HDFC for a mortgage program.
Earlier this year Qatar Investment Authority backed the commercial property development platform of Bangalore-based RMZ Corporation with $300 million and ADIA was reported to have committed $200 million to Kotak Realty Fund.
More on Real estate
Latest News
Asian GPs slow implementation of ESG policies - survey
Asia-based private equity firms are assigning more dedicated resources to environment, social, and governance (ESG) programmes, but policy changes have slowed in the past 12 months, in part due to concerns raised internally and by LPs, according to a...
Singapore fintech start-up LXA gets $10m seed round
New Enterprise Associates (NEA) has led a USD 10m seed round for Singapore’s LXA, a financial technology start-up launched by a former Asia senior executive at The Blackstone Group.
India's InCred announces $60m round, claims unicorn status
Indian non-bank lender InCred Financial Services said it has received INR 5bn (USD 60m) at a valuation of at least USD 1bn from unnamed investors including “a global private equity fund.”
Insight leads $50m round for Australia's Roller
Insight Partners has led a USD 50m round for Australia’s Roller, a venue management software provider specializing in family fun parks.