Times of India: November, 2016
MUMBAI/BENGALURU: Canadian Pension Plan Investment Board (CPPIB) has emerged as a strong contender to clinch a Rs 2,000-crore ($300-million) deal to buy into select mall assets of Atul Ruia-led Phoenix Mills, multiple people familiar with the matter said. Phoenix, which owns and operates some of the country's largest integrated consumption centres, has a network of eight malls with six million sqft leased space across six cities. CPPIB, a pension asset manager with $300 billion invested globally, is expected to buy into select retail assets of the Mumbai-headquartered Phoenix. The deal under discussions would cover the one million sqft Phoenix Market City Mall in the Whitefield suburb of Bangalore, and another project under planning, sources cited earlier added. While Market City is a premium destination in mega urban centres, the company has also forayed into mall development in smaller cities like Lucknow, Agra and Indore under the banner of Phoenix United.
GIC of Singapore is another investor in the fray, though the Canadian rival has moved ahead in the deal making, sources said. Phoenix had sought the advise of two global investment banks to unlock value for financing its ambitious future developments. Emailed queries, calls and text messages to Phoenix Mills and the top executives on Wednesday went unanswered at the time of going to press.
Phoenix, which heralded the transformation of Mumbai's textile mill lands into upscale real estate developments beginning with Palladium and High Street Phoenix in Lower Parel, has more than 17.5 million sqft in retail, hospitality, commercial and residential assets. The company earned retail rental income of Rs 710 crore for the year ended March 2016.
CPPIB's interest in Indian retail infrastructure comes at a time when global peers such as Blackstone Group, Dutch pension asset manager APG and GIC of Singapore have stepped up investment activity in the sector. It opened an India office one year ago as part of a concerted push into the world's fastest growing major economy where it would buy stable income-yielding assets in real estate and infrastructure.
Blackstone has floated a fully owned subsidiary Nexus Malls, which has started acquiring assets including L&T's Seawoods mall in Navi Mumbai and AphaOne malls in Amritsar and Ahmedabad. Singaporean sovereign investor GIC has picked up 50% stake Runwal Group's RCity mall at Ghatkopar in Mumbai. APG Asset Management said it was buying a portfolio of malls from Virtuous Retail, the retail development arm of The Xander Group, earlier this month.