India's Piramal Enterprises, Canadian Pension Fund to Invest $500 Million in Indian Residential Property

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Piramal Enterprises Limited, one of India's largest diversified companies, will partner with Canada Pension Plan Investment Board to create a $500 million fund to invest in India's residential property market.

Piramal and the Canadian public pension fund will invest equal amounts to provide debt financing to top tier, local developers, according to a joint announcement. The focus for the fund will be on residential developments in Mumbai, Delhi NCR, Bangalore, Pune and Chennai.

"This opportunity allows us to participate in India's burgeoning middle class residential sector which has demonstrated compelling fundamentals through ongoing population and income growth, and rapid urbanization," Graeme Eadie, senior vice-president and head of real estate investments, CPPIB, said in a statement.

Global and local investment funds are targeting Indian property as the market recovers.

Mumbai-based IIFL Private Wealth announced last month it had raised $117.3 million to invest in Indian real estate.

Last year, Singapore's GIC Pte Ltd, Temasek Holdings and Oman's State General Reserve Fund announced they would invest $200 million in a sector fund by Indian mortgage lender HDFC Ltd, Reuters reports.

In November, GIC Pte Ltd. also announced it was joining Ascendas Pte. to invest as much as S$600 million in commercial property in India.

Following a difficult time in 2013, demand and price growth is expected to pick up for India's residential property market.

"Pan-India residential real estate prices are likely to grow at 10 to 12 per cent year-over-year [in 2014]," said Anuj Puri, the chairman and country head of Jones Lang LaSalle India.