The Canada Pension Plan Investment Board (CPPIB) and the Mumba-based developer Shapoorji Pallonji have jointly acquired an industrial park in the southern Indian city of Chennai via a joint venture platform in a deal that values the property at $220 million.
The acquisition marks the first investment made by the joint venture partnership, which was formed by the two firms more than a year and a half ago.
In a statement announcing the deal, CPPIB said that SPREP, the name of the JV platform, has signed an agreement to acquire 100 percent of the securities of a company called Faery Estates Private, which owns, operates and maintains the SP Infocity IT Park, the 2.7 million square feet industrial park located in Chennai.
“SP Infocity IT Park is a high-quality property and is an excellent first acquisition for SPREP,” said Andrea Orlandi, managing director, real estate investments, CPPIB. “Through this investment by SPREP, CPPIB continues to demonstrate our long-term commitment to the Indian real estate market. The IT Park, located on the Old Mahabalipuram Road, has close to 2.7 million square feet of operational space, which is leased to firms such as HSBC, Amazon, Ford, Siemens, Citibank, AT&T, and Hapag Lloyd.”
CPPIB had made its foray into the Indian real estate market with the formation of this joint venture partnership in December 2013. The $250 million partnership was to be an office joint venture, with CPPIB committing $200 million in equity initially for an 80 percent stake, and Shapoorji putting up the remainder. During the time, the equity was planned to be initially invested in stabilized properties substantially leased to prominent tenants, according to a company statement, while also undertaking active asset management to generate value-added returns.
A few months later in February 2014, CPPIB also teamed up with Mumbai-based private equity investment firm Piramal Fund Management to create a real estate debt platform with a strategy to finance residential developments in key Indian markets. Each firm had a 50 percent stake in the venture, having contributed $250 million in equity.
As of the end of March 2015, CPPIB had C$34.1 billion (€24.59 billion; $27.58 billion) in real estate investments globally.