After a Rs 15,000-crore pact with Brookfield Asset Management, Bengaluru-based property developer RMZ could soon sign deals with Canada’s biggest pension fund manager Canada Pension Plan Investment Board (CPPIB) and Japan’s Mitsui for commercial properties.
Though both deals were supposed to get signed in March this year, they were delayed due to the lockdown and halting of international flights to and from the country.
RMZ and CPPIB were planning to sign a deal for the former’s Chennai assets and with Mitsui, RMZ wanted to ink a deal for its Bengaluru properties. Mitsui and CPPIB were looking to invest similar amounts — in the range of Rs 1,200-1,500 crore, reports said late last year.
According to Raj Menda, chairman of RMZ, the deal would be higher than what was originally planned and involves more cities than just Chennai and Bengaluru.
“The deals are very much on. They want to put more money. In fact, they want to invest in projects in whichever cities we enter,” said Menda.
“The amount may go up. Initially, it was meant for Chennai and Bengaluru but they may want to invest in whichever cities we enter,” he added. He said there is no upper cap for both the deals as the two investors are ready to invest as much as RMZ requires. CPPIB and Mitsui could not be contacted for comments.
Though CPPIB had a joint venture with the Shapoorji Pallonji group for investing in commercial properties, the joint venture did not see much action. CPPIB ‘s venture with Piramal Capital to provide debt to property developers did not go as planned as the partners felt there was not enough opportunities in the market.
CPPIB has signed a JV with Phoenix Mills to invest in malls in the country. Large platform deals in the commercial space have picked up. Besides the GIC-DLF deal for the latter’s rental arm, Blackstone inked a Rs 9,160-crore pact with Prestige for its commercial properties, including malls.
RMZ sold its 12.5 million square feet portfolio to Brookfield for Rs 15,000 crore recently. The deal also involved the Menda family-owned co working firm Cowrks.
Besides appreciation in rents, commercial properties are considered low risk and provide fixed income to investors. They also give exit opportunities to investors in the form of real estate investment trusts (REITs).
Blackstone, along with its partners Embassy group and K Raheja Corp, floated and listed two REITs in the country. Brookfield has filed a draft red herring prospectus for its REIT with the Securities and Exchange Board of India (Sebi).