CPPIB Credit Investments Inc., a wholly-owned subsidiary of Canada Pension Plan Investment Board (CPPIB), and Piramal Enterprises (PEL), one of India's largest diversified companies, announced today a strategic alliance for providing rupee debt financing to residential projects across India's major urban centres. CPPIB and PEL have each initially committed USD250 million for this purpose.

Indiareit Fund Advisors (Indiareit), the real estate fund management arm of PEL, has been appointed as advisor. 

The investment focus shall include the provision of project level debt financing to top tier, local developers with a strong track record in delivering high-quality residential projects. The focus will be on residential developments in Mumbai, Delhi NCR, Bangalore, Pune and Chennai - markets with good civic infrastructure, strong employment and population growth forecasts, which provide favourable absorption dynamics for middle income housing. 

''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,'' said Graeme Eadie, senior vice-president and head of real estate investments, CPPIB. ''We are pleased to be fully aligned with an experienced operator with a strong track record.''

Ajay Piramal, chairman, Piramal Enterprises said, ''We are extremely pleased to be partnering with an institution like CPPIB who are a like-minded, focused and committed global investor. This is an opportune time to be creating an aligned pool of capital to target what we believe to be very compelling financing opportunities in the real estate sector. The alliance is consistent with PEL's long term plan and vision of playing a contributing role towards investments that promote growth and underlines the confidence reposed by institutional investors in Indiareit's capabilities.'' 

Macquarie Capital acted as the sole financial advisor to PEL on the transaction. CPPIB was advised by Vikram Gandhi, founder of VSG Capital Advisors, and CPPIB's Senior Advisor for investment opportunities in India. 

Shares of the company declined Rs 10.95, or 2.03%, to settle at Rs 529. The total volume of shares traded was 7,465 at the BSE (Wednesday).