Bengaluru-based developer RMZ Corp has struck a joint venture with Canada Pension Plan Investment Board (CPPIB) for office projects in Chennai and Hyderabad, the companies said in a statement.
CPPIB will put in $210 million (Rs 1,573 crore) for the development of 10.4 million square feet; 7.5 million sq ft is under development while the rest will commence soon.
The three projects under development are RMZ Nexity (Hyderabad), RMZ Spire (Hyderabad) and RMZ One Paramount (Chennai).
Manoj Menda, corporate chairman of RMZ, said that the value of the assets under the partnership, once developed, is estimated to be over $1.5 billion.
“With equity deals for assets over the last few months, we have ample headroom to achieve our next phase of growth,” said Arshdeep Sethi, managing director, RMZ.
In October 2020, VCCircle reported that RMZ had struck a deal with Canadian investor Brookfield to sell 12.5 million sq ft for $2 billion.
The proceeds were majorly used to pare debt.
RMZ aims to grow its real estate asset portfolio from 67-85 million sq ft over the next six years.
In the last few years, it has offered exits and brought in new investors. In 2018, promoters bought back stakes held by Qatar Investment Authority (QIA) and Baring Private Equity Partners India in a unit, marking one of the biggest exits for private investors in India’s real estate.
In 2020, it struck an equal joint venture of $1 billion with Mitsui Fudosan, marking the Japanese developer’s maiden Indian investment.
The latest development comes at a time when the office market has come under pressure from the work-from-home trend. However, analysts believe the long-term potential of office spaces remains intact.
CPPIB has exposure to different asset classes in the Indian real estate market. Back in 2017, it had set up a platform with Mumbai-listed developer The Phoenix Mills for a play in India’s retail real estate market.
It had also tied up with IndoSpace, the developer of warehousing and industrial parks in the country.
As of December 31, 2020, CPPIB’s investments totalled C$475.7 billion globally.