Tata Realty, CPPIB tie up for C$866-million commercial office space JV

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TATA Realty and Infrastructure Limited, a 100 percent subsidiary of Tata Sons and one of the leading real estate development companies in India, and the Canada Pension Plan Investment Board (CPP Investments), a professional investment management organisation, announced the formation of a new joint venture to build and own commercial office space in India.

The joint venture would focus on stabilised and development properties, with a goal of managing assets worth more than Rs 50 billion (Canadian $800 million).

The joint venture's total equity worth will be Rs 53 billion (C$8661 million), with CPP Investments contributing Rs 26 billion (C$438 million), according to the joint press release issued by the two firms.

The joint venture will be seeded with two assets, Intellion Park Chennai and Intellion Edge Gurgaon, National Capital Region of Delhi, which are currently owned and managed by Tata Realty and Infrastructure Limited.

With an equity allocation of Rs 20 billion (C$333 million), the joint venture would also pursue Grade A commercial developments in India's key gateway cities. Mumbai, Delhi, Pune, Bengaluru, Hyderabad and Chennai are among the cities under consideration, as they account for the majority of India's total Grade A office space stock and demand, the press release stated.

"Tata Realty and Infrastructure Limited believes in building centres of excellence that provide tenants with high-quality spaces that enable businesses to grow and evolve," Sanjay Dutt, MD and CEO, Tata Realty and Infrastructure Limited, said.

"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," he said.

"This new relationship with Tata Realty and Infrastructure, one of India's leading operators, 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," Hari Krishna V, Managing Director, Head of Real Estate India, CPP Investments, said.