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Phoenix Mills up 6% on joint venture with CPP Investments to develop asset in Lower Parel

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Shares of the retail mall developer and operator, Phoenix Mills, surged as much as 6 percent on Tuesday. This comes after the company and Canada Pension Plan Investment Board (CPP Investments)  announced a new joint venture to develop an office-led mixed-use asset in Lower Parel, Mumbai.

Phoenix Mills up 6% on joint venture with CPP Investments to develop asset in Lower Parel
Shares of the retail mall developer and operator, Phoenix Mills, surged as much as 6 percent on Tuesday. At 9:41 am, shares of the company were up 1.5 percent at Rs 1,139.55 on the BSE.
The stock is nearly 4 percent away from hitting its 52-week high of Rs 1,199.95. It has been gaining for the last two days and has risen over 7 percent during the period.
Today's upmove comes after the company and Canada Pension Plan Investment Board (CPP Investments)  announced a new joint venture to develop an office-led mixed-use asset in Lower Parel, Mumbai.
CPP Investments will commit to investing approximately Rs 13.5 billion in tranches, for an ultimate equity stake of 49 percent in Plutocrat Commercial Real Estate Private Ltd (PCREPL), the entity that will own the asset.
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"Post the subsequent tranches of investment by CPP Investments, subject to the fulfilment of the terms mentioned in the Definitive Agreements, it is envisaged that CPP investments may further increase its stake from 35.90 percent to 49.00 percent in the share capital of PCREPL as per the terms and
conditions of the Definitive Agreements," Phoenix Mills said in an exchange filing.
The target completion date for the development is 2026.
The office-led mixed-use asset will complement the existing retail development at Phoenix Palladium, Mumbai and St. Regis, Mumbai hotel, Phoenix Mills said.
Cumulatively, CPP Investments’ equity commitment in multiple joint ventures with Phoenix Mills now stands at approximately Rs 41 billion.
"We highlight that first tranche infusion implies overall equity value at Rs 2,192 crore for the project vs. our assigned value of Rs 1,867 crore (upside of ~ Rs 17/share or about 1.5 percent to overall target price). Moreover, equity investment assures growth capital without any leverage needs," said ICICI Direct Research.
With only five to six major retail mall developers currently in India and given its unique selling point of operating large format properties efficiently, the brokerage believes Phoenix Mills remains a superior player in the medium to long term.
 
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