tata: CPPIB, Tata Realty ink Rs 5,300-cr equity JV for commercial developments in India

The Canada Pension Plan Investment Board (CPP Investments) and Tata Realty and Infrastructure Ltd (TRIL), have entered into a joint venture to develop and own commercial office space across India.

The joint investment platform will target stabilized and development assets, aiming to reach over Rs 13,000 crore in assets under management. The total aggregate equity value of the joint venture will be Rs 5,300 crore, with CPP Investments’ equity commitment of Rs 2,600 crore.

“This is the beginning of a very strong partnership…With CPP Investments as a strategic long-term partner, the vision of this joint venture is to provide world-class sustainable office space solutions to a diverse set of businesses. This will enable the opening up of new business opportunities for Tata Realty and Infrastructure, allowing us to accelerate our current growth,” Sanjay Dutt, MD & CEO, Tata Realty and Infrastructure.

Tata Sons’ real estate development arm will seed the platform with two assets, Intellion Park Chennai and Intellion Edge Gurgaon, National Capital Region of Delhi, which are currently owned and managed by the developer. Gross asset value of these two assets is Rs 8,000 crore.

Intellion Edge has gross leasable area of 1.8 million sq ft, of which 50% is ready and operational. Intellion Park has a total gross leasable area of 4.6 million sq ft and is fully operational.

“This new relationship with Tata Realty & Infrastructure provides an excellent avenue from which to explore opportunities in the fast-growing commercial real estate sector. It is an important step in expanding CPP Investments’ relationships with leaders in the market, to deliver solid long-term adjusted risk-adjusted returns to CPP contributors and beneficiaries,” said Hari Krishna V, Managing Director, Head of Real Estate India, CPP Investments.

ET was first to break the story in June that CPP Investments and Tata Realty were in talks to set up this office asset development platform in India.

The joint venture will also pursue Grade A commercial developments in key gateway cities in India, with an equity allocation of Rs 2,000 crore. These developments are estimated to provide additional 12-14 million sq ft commercial assets worth Rs 5,000 crore to the joint platform.

According to Dutt, the company is already in talks to acquire land parcels in key cities including Mumbai, Delhi, Pune, Bangalore, Hyderabad, and Chennai that collectively contribute the majority of India’s total Grade A office space stock and demand.

Currently, Tata Realty already has 7.5 million sq ft ready and operational commercial assets apart from around 14 million sq ft under design and development. The company is looking to expand its portfolio of commercial projects to 45 million sq ft in the next few years until 2027.

In December, Tata Realty announced its plan to invest over Rs 5,000 crore to undertake the development of a 47.1-acre integrated commercial project, its largest ever such development, in Navi Mumbai’s Ghansoli locality. The company counts leading global institutional investor Actis as its key equity partner for this 7-million-sq-ft project.