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Bengaluru: Ivanhoé Cambridge, a real estate subsidiary of Canada’s second-largest pension fund Caisse de dépôt et placement du Québec (CDPQ), and the Embassy Group have signed an agreement to set up a commercial office platform, said two people familiar with the development, requesting anonymity.

The platform will be set up as an alternative investment fund (AIF) and is awaiting markets regulator, the Securities and Exchange Board of India (Sebi)’s approval. “It’s an 80:20 joint venture platform with a development timeline of five years. Ivanhoe Cambridge will put in $150 million to start with, and Embassy’s contribution will be $30 million. It will also provide existing land parcels for some projects," said one of the two people.

When contacted, spokespeople of Embassy and Ivanhoe Cambridge declined to comment.

The Ivanhoe-Embassy fund will develop greenfield office projects across cities, but primarily in Bengaluru, where Embassy has a stronghold.

Once the Embassy-Indiabulls merger is complete, the new office platform will be a part of the merged entity.

“For Ivanhoe Cambridge, the partnership model makes sense. While direct investing requires control in ready assets, an investor needs development partners for under-construction projects. Investors with a long-term investment view continue to believe in the office asset class. However, there are also a few who are questioning whether large offices are needed," said Shashank Jain, partner, deals, PWC.

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