CPPIB, Phoenix Mills JV for Office-Led Mixed-Use Development

Global investment major the Canada Pension Plan Investment Board and retail mall developer The Phoenix Mills have entered into a new joint venture to develop an office-led mixed-use asset in Mumbai’s prime Lower Parel area. CPP Investments will commit to investing around Rs 1,350 crore in tranches, for an ultimate equity stake of 49% in Plutocrat Commercial Real Estate Pvt Ltd (PCREPL), the entity that will own the asset. The asset forms part of a larger mixed-use development at Phoenix Palladium, Mumbai. With the funds invested by CPP Investments and Phoenix Mills, PCREPL will develop office space with a potential leasable area of around 1 million sq ft and flagship retail space with a potential leasable area of around 2 lakh sq ft. The target completion date for the development is 2026. “We are confident that Lower Parel will cement its pole position as the central business district of choice with the various infrastructure initiatives underway and we are confident of strong office demand in the coming years,” said Atul Ruia, Chairman, The Phoenix Mills. According to him, the proposed office development will complement the attractiveness of Phoenix Palladium that already houses over 250 luxury stores and witnesses synergies with luxury hotel, The St. Regis Mumbai. Cumulatively, CPP Investments’ equity commitment in multiple joint ventures with Phoenix Mills now stands at around Rs 4,100 crore. “As a longstanding investor in India, this investment cements our already strong and deep presence in the country’s fast growing property sector, and will deliver steady, long-term returns for CPP contributors and beneficiaries,” said Hari Krishna, Managing Director, Real Estate -- India, CPP Investments. Phoenix Mills and CPP Investments’ first joint venture, Island Star Mall Developers (ISMDPL), was formed in 2017 to develop, own and operate retail-led, mixed-use developments across India. Phoenix Marketcity in Whitefield Bengaluru served as the seed asset for the alliance. “In CPP Investments, we have a like-minded partner and together, we are excited to deliver on this new development,” said Shishir Shrivastava, Managing Director at The Phoenix Mills. In addition to owning and operating Phoenix Marketcity, ISMDPL owns and is currently developing three retail-led, mixed-use developments at Wakad Pune, Hebbal Bangalore and Indore. In May, both the entities entered into a second joint venture to develop a regional retail centre in Alipore, Kolkata. Phoenix Mills has an operational retail portfolio of 7 million sq ft spread across 9 operational malls in 6 key cities of India. The company is further developing 5 malls with over 6 million sq ft retail space in five cities of the country. Besides retail, Phoenix Mills has an operating commercial office portfolio with gross leasable area of 1.5 million sq ft and plans to add around 5 million sq ft of commercial office across existing retail properties. It also owns two hotels aggregating to 588 keys and 1 ongoing residential project in Bengaluru.