Canada Pension Plan Investment Board is set to enter the Indian retail property market with a 16 billion-Indian-rupee investment in a platform that will develop, own and operate retail-led mixed-use developments in the country.

The pension fund is initially taking a 30% interest in the Island Star Mall Developers Pvt. Ltd. platform for about 7.24 billion rupees, and it will gradually up its stake to 49%. The definitive agreement was signed with the platform's parent, The Phoenix Mills Ltd.

Island Star Mall owns the Phoenix MarketCity Bangalore, which offers about 1 million square feet of leasable area in the Whitefield residential hub in Bangalore. Island Star Mall will use the fund's investment to buy and develop greenfield assets on newly purchased sites and to redevelop existing retail assets.

The Phoenix Mills will serve as the manager of all the assets developed or renovated by the joint venture.

CPPIB said in a statement that the partnership is the fund's first retail real estate venture in India that is focused on buying or developing retail assets in tier-1 Indian cities.

As of April 5, US$1 was equivalent to 64.97 Indian rupees.