Mall developer Phoenix Mills Ltd (PML) and Canada Pension Plan Investment Board (CPP Investments) on Monday said they have entered into a new joint venture to develop an office-led, mixed-use asset in Mumbai’s Lower Parel.
The property is part of a larger mixed-use development at the existing shopping mall Phoenix Palladium, in Mumbai.
CPP Investments has committed to investing about Rs 1350 crore in tranches, for an ultimate equity stake of 49% in the entity, known as PCREPL, which will own the asset.
With the funds invested by CPP Investments and PML, PCREPL will develop office space with a potential leasable area of around one million sq ft and retail space with leasable area of 0.2 million sq ft.
The project is expected to be completed by 2026.
"I am delighted to further expand our existing relationship with CPP Investments and together we will look to create an exemplary office-led development at Lower Parel. Our upcoming office spaces will be designed with the aim to cater to global clientele. 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, Phoenix Mills.
PML and CPP Investments' first joint venture, Island Star Mall Developers Pvt Ltd (ISMDPL), was formed in 2017 to develop, own and operate retail-led, mixed-use developments across the country. Phoenix Marketcity in Whitefield, Bengaluru was s the seed asset for the alliance. In addition, ISMDPL owns and is currently developing three retail-led, mixed-use projects at Wakad-Pune, Hebbal-Bengaluru and Indore.
In May 2021, a second joint venture between PML and CPP Investments was formed to develop a shopping centre in Alipore, Kolkata.
"…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, MD, real estate – India, CPP Investments.
Cumulatively, CPP Investments' equity commitment in multiple joint ventures with PML now stands at about Rs 4100 crore.
In June, Phoenix Mills and Singapore’s sovereign wealth fund GIC Pte Ltd said they have jointly set up a $733 million investment platform for retail and office assets in India.
GIC would acquire a significant minority stake in the retail-led, mixed-use portfolio of projects that will be located Mumbai and Pune. These properties of around 3.4 million sq ft of leasable space are currently among PML’s operational assets.
“Situated at Lower Parel, Mumbai, Phoenix Palladium enjoys a premium catchment area. This is a much sought-after destination with strong residential catchment and the convergence of public transport systems providing easy connectivity from all parts of city. With a state of the art, elegantly designed modern multi-use tower, the new development will truly become the jewel in the crown of Phoenix Palladium. In CPP Investments, we have a like-minded partner and together, we are excited to deliver on this new development,” said Shishir Shrivastava, MD, PML.