Cadim: the China and India Real Estate Market Entry Decisions

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Cadim: The China and India Real Estate Market Entry Decisions

I. INTRODUCTION
Cadim is a real estate division of Caisse de Depot et Placement du Quebec (Caisse), Canada’s largest pension fund management firm. Caisse is the largest institutional investor in Canada, overseeing more than $245 billion in assets and carrying out more than $12 billion in transactions daily. Cadim is one of Caisse’s three real estate divisions comprising around 6.23% of Caisses portfolio ($15.3 billion). Cadim focuses on residential and hotel markets, while the other two real estate arms focus primarily on shopping malls and business.
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Despite there being individual deals which were profitable because Cadim scale, continuous exceptional performance would be very difficult. Despite being a multinational company, because Cadim’s previous real estate investments are all in developed countries they are not a diversified as they could be. Cadim thus decided to look to developing nations who’s average returns were considerably higher.

China:
General:

Real Estate:
The Chinese real estate market has grown exponentially over the past decade. China has built the equivalent of a city the size of New York once a year, but can still not keep up with demand. This demand is predominantly driven by residential and infrastructure construction in major cities. The surge in real estate production and demand has been driven by mass migration of the Chinese people from more rural areas to the more populated metropolitan areas and government supported infrastructure projects. This real estate growth has been one of the primary causes allowing China’s economic to prosper.

Because Chinas GDP is directly tied to construction, China has continued to increase its construction as a way of “inflating” its

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