Canada Pension Plan Investment Board (CPP Investments) and Bengaluru-based RMZ Corp. announced a joint venture for three office projects on Sunday, with the Canadian fund investing $210 million.
The joint venture includes three projects—RMZ Nexity and RMZ Spire in Hyderabad and RMZ One Paramount in Chennai—with a development potential of around 10.4 million sq. ft.
Last year, RMZ had sold 18% or 12.8 million sq. ft of its office assets to a fund managed by Brookfield Asset Management Inc. for $2 billion in one of the largest real estate deals in the country. As part of the transaction to reduce debt, it also sold its co-working business ‘CoWrks’ to Brookfield.
“…The partnership with CPP Investments, a globally respected institutional investor, will only strengthen our vision of achieving our hyper-growth strategy target of RMZ 2.0. The value of the partnership assets, once developed, is estimated to be over $1.5 billion,” said Manoj Menda, corporate chairman, RMZ.
RMZ had partnered with long-term institutional investors in the past as well. In 2013, Qatar Investment Authority (QIA) had invested $300 million in RMZ, and in 2019, it formed a partnership with global developer Mitsui Fudosan for $1 billion to jointly develop assets in the country.
“…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.
Of the 10.4 million sq. ft in the RMZ-CPP Investments joint venture, 7.5 million sq. ft is already under development, with remaining construction starting in the coming months.
“As India continues to be a strong source of global talent, demand for collaborative and engaging workspace is expected to grow,” said Hari Krishna, managing director, real estate – India, CPP Investments