The Canada Pension Plan Investment Board has announced a $32-million investment to acquire land in Pune, one of India’s largest cities, for retail real estate development.

The pension fund made the acquisition through Island Star Mall Developers Pvt. Ltd, a strategic investment platform it established with Indian retail developer the Phoenix Mills Ltd. in April. To date, CPPIB has invested $145 million in the platform and owns 30 per cent of it.

Read: CPPIB enters Indian retail real estate market

“Pune’s attractive demographic and economic growth profile combined with an undersupplied retail market makes this an ideal location for a high-quality retail and entertainment destination and is well suited to CPPIB’s long-term investment horizon, said Andrea Orlandi, managing director and head of real estate investments for Europe at the CPPIB, in a news release. “We look forward to expanding our platform with Phoenix Mills across other cities.”

The CPPIB bought about 1.6 million square feet of land and plans to use about one million square feet to develop retail space in Pune. The site is attractive because the area is experiencing a strong housing demand, according to the CPPIB, noting it is hoping the retail space will draw in the growing middle-to-high income people who live nearby.

Read: CPP fund grows by $9.8B with ‘significant uplift’ from global equity

The new development will complement the existing mall that Phoenix Mills has already developed east of the city, noted Atul Ruia, joint managing director at the Phoenix Mills Ltd. “We look forward to working with CPPIB to acquire or develop additional high-quality retail assets across India’s top cities.”

Copyright © 2017 Transcontinental Media G.P. Originally published on benefitscanada.com

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