CPP Investments to exit mall and offices platform with Phoenix Mills, to receive Rs 5,449 crore

PML has an extensive partnership with CPP Investments

Real estate developer The Phoenix Mills Ltd (PML) announced that the Canadian pension fund CPP Investments will exit Island Star Mall Developers Ltd (ISMDPL), a mall and offices development platform that the pair had formed in 2017, with CPP Investments receiving around Rs 5,449 crore as part of the stake buyout. The platform includes a shopping mall in Indore, and two retail-led mixed-use mall-and-office developments in Bengaluru and Pune.

In an exchange filing, PML announced that the company will pay the consideration to CPP Investments over four tranches in a three year period. For FY25, the three projects that are part of the ISMDPL platform, had a consolidated turnover of nearly Rs 920 crore, compared to Rs 612 crore the year prior.

PML owns 51 percent of ISMDPL, with CPP Investments owning the rest. The latter had committed around Rs 724 crore in investment, owning a 30 percent stake in the platform, increasing its stake later.

PML has an extensive partnership with CPP Investments, being part of two more mall and mixed-use development platforms. One of them, PCREPL, has been formed to develop an office-led mixed-use project at PML's Lower Parel site in Mumbai, that includes the Phoenix Palladium mall and the St Regis hotel, owned by the developer. CPP Investments has committed an investments of Rs 1,350 crore for a 49 percent stake in the project, expected to be completed in 2026.

The other platform, Mindstone Mall Developers, was formed to set up a shopping mall in Kolkata, the Phoenix Grand Victoria, in Kolkata's Alipore suburb, for which the pension fund is investing around Rs 560 crore. The project is also set to be complete in 2026.

In an exchange filing, PML said the proposed buyout of CPP Investments' stake is to consolidate its "high-performing assets" fully under the company.

"The company believes that the proposed transaction represents a compelling strategic and financial opportunity to strengthen its position in India’s highly competitive commercial and retail real estate development market. The proposed transaction is aligned with the company’s strategic vision to consolidate ownership in high-performing assets comprised in the ISMDPL platform, with a clear long-term growth trajectory and generate sustainable long-term value," PML said in the filing.