INDIA - The Caisse de dépôt et placement du Québec, Canada's largest pension fund, is weeks away from its entry into Indian property as part of a strategy to switch 15% of its portfolio to Indian real estate within 3—5 years.
"We're in discussions and we're close to a deal," said Amélie Plante, a spokeswoman for the CA$237bn (€175bn) fund. "It won't be in a year - more likely, it'll be weeks or months."
The joint venture being negotiated by the fund's CA$10.3bn subsidiary, SITQ, will develop office in Mumbai and capital Delhi, rather than investing in existing assets.
"In some markets there's a lack of quality assets. There's just not much to buy in India," said Plante.
She also ruled out short-term regional diversification. "We only do major cities. We don't invest in England: we invest in London," she said.
The timing of this move has been determined as much by the global real estate market as by recent Indian economic reforms, she continued.
"If we want to keep growing, we need emerging markets," said Plante, adding the subsidiary, which manages all its non-domestic assets via joint ventures, would opt for delegated rather than remote management of the assets.
The fund should at least have little trouble financing its acquisition as a report published last week by Standard & Poor's confirmed the pension scheme's long-term AAA credit rating, based on criteria such as liquidity.