The Canada Pension Plan Investment Board is joining up with mall developer Phoenix Mills Ltd. to develop, own and operate retail properties in India.
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The partners will develop the projects through the Island Star Mall Developers Pvt. Ltd. platform, a subsidiary of the Phoenix Mills. Island Star owns Phoenix MarketCity Bangalore, a major mall in India that opened in 2011.
The CPPIB will initially acquire 30 per cent of the platform for $149 million, with plans to invest $330 million in several tranches to own up to a 49 per cent stake. The investments will go towards developing greenfield assets and transform existing properties into malls.
“We believe that India will be a leading source of global growth in the coming decades and that there will continue to be attractive investment opportunities for CPPIB,” said Andrea Orlandi, managing director and head of real estate investments for Europe at the CPPIB. Orlandi noted the move represents the CPPIB’s entry into retail real estate in India.
While North American retailers have been struggling, the CPPIB predicts the retail sector in India will see sustained growth as international players seek to enter the market to cater to a growing middle class.
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