Canada pension board to invest $250 million in Phoenix Mills unit
MUMBAI: Canada Pension Plan Investment Board (CPPIB) will invest as much as $250 million in Island Star Mall Developers Pvt Ltd, a unit of Phoenix Mills Ltd.
A joint announcement by CPPIB and Phoenix Mills said Canada’s largest pension fund will initially own 30% in Island Star Mall with an equity commitment of around ₹724 crore.
The pension fund plans to invest a total of approximately ₹1,600 crore (approximately $250 million) in multiple tranches, to eventually own up to 49%.
Island Star owns Phoenix MarketCity Bengaluru, a mall which opened in 2011, with gross leasable area of 1 million sq. ft.
The mall is located Bengaluru’s Whitefield locality, a residential and commercial area.
The funds will be used for acquiring and developing both greenfield assets on newly purchased land banks, as well as existing operating retail assets.
Phoenix Mills will manage all development and operational assets in Island Mall.
This is a first-of-its-kind transaction for India’s retail real estate industry, said Atul Ruia, joint managing director at Phoenix Mills, adding that CPPIB brings significant experience and expertise in creating and managing retail assets across the globe.
Phoenix Mills is a developer and operator with around 6 million sq. ft of retail space across eight malls in six cities.
It has developed assets of over 17.5 million sq. ft spread across retail, hospitality, commercial and residential properties.
CPPIB, which opened its investment office in India in October 2015, also has a partnership with Larsen and Toubro Ltd.
CPPIB had announced a commitment of ₹2,000 crore in L&T’s infrastructure asset development subsidiary L&T Infrastructure Development Projects Ltd in December 2014.
The pension fund has invested in Kotak Mahindra Bank Ltd and owns around 6.26% stake in the bank.As of 31 December 2016, CPPIB had assets worth Canadian $298.1 billion, and has committed about $3.7 billion in India so far.
According to real estate consulting firm JLL India, 2017 is likely to see the highest mall space becoming operational in the country, second to 2011.