UPDATE 1-Canada's CPPIB targets India office market with $200 mln JV deal

Thu Nov 28, 2013 12:53pm EST

By Euan Rocha and Indulal PM

TORONTO/MUMBAI Nov 28 (Reuters) - Canada Pension Plan Investment Board (CPPIB) will invest $200 million to get an 80 percent stake in a real estate joint venture with India's Shapoorji Pallonji Group, its first foray into the property market in Asia's third-largest economy.

The joint venture will invest in leased income-producing office buildings, according to a statement issued by the two parties on Thursday.

"We are delighted to be partnering with Shapoorji Pallonji to launch our first real estate venture in India," Mark Wiseman, the head of CPPIB, said in a release. "India is a key growth market for CPPIB, and, as a long-term investor, we believe there are attractive investment opportunities across various sectors."

CPPIB is one of Canada's top pension fund managers with some C$192.8 billion ($182 billion) in assets under management. It has been making big bets on real estate assets across the globe, and currently has about C$22 billion invested in the sector.

The venture will target office assets in India that are leased to prominent tenants and are compliant with regulations governing direct foreign investment, the fund said.

The move is the latest in a string of CPPIB real estate investments. Last month, the fund announced a tie-up with Banco BTG Pactual S.A. to invest in residential development in Brazil.

This year alone, it has also outlined investments in real estate assets in South Korea, Spain, Britain, Canada and Japan.

CPPIB said its venture in India will be supported locally by the Shapoorji Pallonji Investment Advisors team.

Shapoorji Pallonji is one of the top real estate developers in India, having worked on projects such as the Bombay Stock Exchange building and the Reserve Bank of India building in Mumbai, the country's financial hub.

The promoters of the group, which traces its roots back to the mid 1800s, are among the largest shareholders in Tata Group - the Indian multinational conglomerate that controls dozens of companies including Tata Steel, Tata Motors and Tata Consultancy Services.

CPPIB was advised by Vikram Gandhi, founder of VSG Capital Advisors. The Canadian fund retained VSG in early 2012 to identify investment opportunities in India.

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