CPPIB, Phoenix Mills form investment platform

CPPIB will initially own 30% of the platform with an equity commitment of around Rs 724 crore

Canada Pension Plan Investment Board (CPPIB) and The Phoenix Mills Limited (PML), India’s largest mall developer, on Wednesday said they have formed a strategic investment platform to develop, own and operate retail-led mixed-use developments across the country.

Island Star Mall Developers Pvt Ltd (ISMDPL), a PML subsidiary that owns Phoenix MarketCity in Bengaluru, will serve as the platform.

CPPIB, Canada’s largest pension fund manager, will initially own 30 per cent of the platform with an equity commitment of around Rs 724 crore. 

CPPIB plans to invest around Rs 1,600 crore, in multiple tranches, to own up to a 49 per cent stake in ISMDPL. Pre-money enterprise value of ISMDPL is pegged at about Rs 2,200 crore.

Opened in 2011, Phoenix MarketCity has gross leasable area of approximately one million square feet and is centrally located in Whitefield, a prominent residential hub and among the largest commercial areas in Bengaluru.

“We are delighted to partner with The Phoenix Mills Limited to launch our first retail real estate venture in India where we will focus on acquiring or developing high quality retail assets across India’s top cities,” said Andrea Orlandi, managing director, head of real estate investments – Europe, CPPIB.

“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. We look forward to expanding our venture with Phoenix Mills, an experienced retail operator and well- aligned partner," he said.

The funds invested will be applied towards acquiring and developing both greenfield assets on newly purchased land banks, as well as existing operating retail assets that are expected to be transformed into highly successful malls. PML will manage all development and operational assets in the platform.

“This is a landmark transaction for Phoenix Mills and a first-of-its-kind for India’s retail real estate industry. In CPPIB, we have found a like-minded strategic partner that brings significant expertise in creating and managing retail assets across the globe. Jointly, we are committed to creating world-class retail assets to provide an unparalleled shopping experience to consumers,” said Atul Ruia, joint managing director, The Phoenix Mills.