The Canada Pension Plan Investment Board (CPPIB) is making its first foray into India's real estate market in a new joint venture as the fund widens its global expansion.
CPPIB and Shapoorji Pallonji Group said on Thursday they have formed a strategic alliance to acquire office buildings in India's major cities.
The giant pension fund portfolio manager will own 80 per cent of the venture with an initial equity investment of $200-million (U.S.).
The move is the latest in a series of real estate investments around the world as CPPIB, manager of the assets of the Canada Pension Plan, seeks to diversify its risk as well as find faster growth opportunities in emerging economies.
"We are delighted to be partnering with Shapoorji Pallonji to launch our first real estate venture in India focusing on stabilized office properties in major urban centres," said Mark Wiseman, president and chief executive officer of CPPIB.
"India is a key growth market for CPPIB and, as a long-term investor, we believe there are attractive investment opportunities across various sectors. We look forward to working alongside Shapoorji Pallonji, a well-aligned and experienced operator/developer in India."
The joint venture plans to focus on foreign-direct-investment-compliant office assets that have prominent tenants, CPPIB said.
India follows on other recent CPPIB investments in global real estate, including a partnership to buy a $2.8-billion (Canadian) Australian office property portfolio, a joint venture to buy a shopping centre in Spain for $226.7-million and malls in Sweden and Britain.
The fund has $22-billion tied up in real estate holdings and $11-billion in infrastructure assets, with most of its portfolio – $97-billion – in public and private equity investments. Another $62-billion is in fixed income holdings such as bonds and other forms of debt.