The Canada Pension Scheme Investment Board (CPPIB) will invest Rs 2,600 crore to acquire a 49% stake in TATA Realty and Infrastructure’s two high-end commercial office projects in Chennai and Gurugram, and their joint venture plans to further invest Rs 2,000 crore to purchase completed land and assets for future growth.
In an interview with PTI, TATA Realty and Infrastructure MD and CEO Sanjay Dutt said the company has formed a partnership with CPPIB to develop and own commercial real estate assets as it remains optimistic about the future potential of the office market in major cities. Indian.
“We want to grow our commercial real estate business. Our goal is to develop 45 million square feet over the next 5 to 7 years,” Dutt said.
The company already has a completed commercial portfolio of 7.5 million square feet, while 14 million square feet are in various stages of design and development from its existing land bank.
“We want to invest at least Rs 2,000 crores to buy new plots of land. For this, we have formed a partnership with the Canada Pension Plan Investment Board,” Dutt said.
Real estate consultant Anarock facilitated the transaction.
As part of this partnership, the Office will acquire a 49% stake in two projects: Intellion Park Chennai with 4.6 million square feet of gross leasable area and Intellion Edge Gurugram with 1.8 million square feet of leasable area. brute. The Chennai project is fully completed while the Gurugram project is 50% complete.
“The total equity value of the joint venture will be Rs 5,300 crore (C$866 million),” he said, adding that CPPIB would invest Rs 2,600 crore (C$438 million). ) in equity.
Tata Realty will own the remaining 51%.
Dutt said the total gross asset value of these two projects will be Rs 8,000 crore (C$1.3 billion) when fully completed.
The joint venture partners intend to allocate more capital investment of up to Rs 2,000 crore (C$333 million) for future acquisitions of land plots and completed assets.
“If there are good opportunities, we can allocate more funds,” Dutt said.
The joint venture will target stabilized and developed assets, aiming to achieve over Rs 5,000 crore (C$800 million) in assets under management.
“We believe in building centers of excellence that provide tenants with high-quality spaces that allow businesses to grow and scale,” Dutt said.
With investments from CPPIB, he said the joint venture’s vision is to provide world-class sustainable office space solutions to a diverse set of businesses.
This will open up new business opportunities for the company and accelerate its current growth, Dutt said.
Hari Krishna V, Managing Director, Head of India Real Estate, CPP Investments, said, “This new relationship with TATA Realty and Infrastructure provides an excellent avenue to explore opportunities in the growing commercial real estate sector.
TATA Realty Infrastructure is a wholly owned subsidiary of Tata Sons. It has an extensive portfolio of over 50 projects in 15 cities.
Tata is one of India’s largest conglomerates, with annual revenue of over $100 billion, and 107 operating companies across seven business segments, employing over 750,000 people globally.
The Canada Pension Plan Investment Board (CPP Investments) is a professional investment management organization that manages the fund in the best interests of more than 21 million contributors and beneficiaries of the Canada Pension Plan.
In order to build diversified asset portfolios, investments are made worldwide in public equities, private equities, real estate, infrastructure and fixed income securities.
As of December 31, 2021, the Fund totaled C$550.4 billion.