Piramal, CPPIB form $500m realty finance fund
India's Piramal Enterprises is to form a $500 million realty debt fund with CPPIB Credit Investments,, a subsidiary of the Canada Pension Plan Investment Board (CPPIB).
The strategic alliance will see CPPIB and Piramal each put $250 million into the fund, which will be managed by Indiareit Fund Advisors, the real estate private equity arm of Piramal.
According to a release, the vehicle will provide rupee-denominated debt financing to residential projects across India's major urban centres of Mumbai, Delhi National Capital Region, Bangalore, Pune and Chennai. It will target top tier, local developers with strong track records in delivering high-quality residential projects.
The CPPIB-Piramal alliance serves as an entry route into the structured debt financing space for Indiareit, which until now has focused on managing structured equity investments in realty development companies.
"This opportunity allows us to participate in India's burgeoning middle class residential sector which has demonstrated compelling fundamentals through ongoing population and income growth, and rapid urbanization," said Graeme Eadie, senior vice-president and head of real estate investments at CPPIB.
Macquarie Capital acted as the sole financial advisor to Piramal on the transaction. CPPIB was advised by Vikram Gandhi, founder of VSG Capital Advisors, and CPPIB's senior advisor for investment opportunities in India.
Last month, Indiareit reached a final close of INR10 billion on its fifth domestic fund. The rupee-denominated Domestic Fund V is focused on investing in residential property in tier one cities.
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