Canada Pension Plan Investment Board (CPPIB) will exit its joint venture with The Phoenix Mills Ltd for Rs 5,449 crore (about $631 million), the Indian real estate developer said Thursday.
The development comes eight years after CPPIB, the North American nation's biggest pension fund, picked up a 49% stake in the JV with the Mumbai-listed shopping mall and office space developer.
Phoenix said that the amount will be paid in four tranches over a period of three years. The amount will be paid either by Phoenix or by Island Star Mall. While Island Star Mall could either declare dividends or buy back CPPIB's stake, Phoenix Mills could also directly or indirectly acquire the shares held by the pension fund.
CPPIB initially teamed up with The Phoenix Mills in 2017 to form a platform to develop, own and operate retail-led mixed use developments in India. The pension fund initially picked up a 30% stake in the JV platform, Island Star Mall Developers Pvt Ltd, for Rs 724 crore. It invested another Rs 938 crore in 2018 to increase its stake to 49%. Phoenix retained 51%.
The joint platform executed several retail-led deals across key markets. The Phoenix Marketcity mall in Bengaluru’s Whitefield was the seed asset for this platform. Thereafter, it bought a land parcel in Pune for Rs 160 crore. In 2018, it bought a land parcel in Bengaluru for Rs 650 crore.
In 2021, The Phoenix Mills and CPPIB said they were extending their commitments to Island Star Mall and that they had agreed to invest collectively up to Rs 800 crore into the platform, in the ratio of their respective shareholdings.
The platform comprises Island Star Mall and three of its subsidiaries–Alyssum Developers Pvt Ltd, Sparkle One Mall Developers Pvt Ltd and Insight Mall Developers Pvt Ltd.
Island Star operates the ‘Phoenix MarketCity’ mall in Bengaluru. Alyssum runs a mixed-use development in Pune, consisting of ‘Phoenix Mall of Millennium’ and office towers known as ‘Millennium Towers’. Sparkle One manages a mixed-use development in Bengaluru consisting of ‘Phoenix Mall of Asia’ and commercial offices under ‘Phoenix Asia Towers’. Insight operates the ‘Phoenix Citadel’ mall in Indore.
Island Star Mall’s consolidated revenue increased to Rs 919.73 crore in 2024-25 from Rs 612.24 crore in 2023-24 and Rs 302.88 crore the year before.
To be sure, both CPPIB and The Phoenix Mills have teamed up with other companies and investors for real estate development. For instance, The Phoenix Mills entered a platform deal with Singapore sovereign wealth fund GIC in 2021 to develop mixed-use projects in Mumbai and Pune. CPPIB, in 2022, formed a joint venture with Bengaluru-based realty firm RMZ to develop and acquire commercial projects across India.