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Brookfield looks to spread its wings in South for commercial deals

Business Standard:  March 22, 2019

Mumbai: Canadian investor taps Bengaluru, Hyderabad, Pune for commercial deals Canadian private equity investor Brookfield is looking to enter cities such as Bengaluru, Hyderabad, Pune, among others, after having bought commercial properties in Mumbai and the National Capital Region (NCR).

“Already, it (Brookfield) is one of the biggest land owners in the NCR and Mumbai and now is looking to do deals with developers in cities in the South,” said a source in the know.

Blackstone and KKR, two of Brookfield’s global rivals, already have a sizeable presence in the South.

In Mumbai, Brookfield has around six million sq ft of commercial space and around 20 million sq ft in the NCR and Kolkata.

According to the source, Brookfield is either developing or acquiring commercial properties worth over three to four million sq ft a year, which is unprecedented in the realty space. Brookfield declined to comment on the issue.

Out of the $7.5 billion Brookfield invested in the country, about $4.5 billion is in real estate. The remaining is mainly in infrastructure and a small amount in private equity, industry sources said. Brookfield has also lent around $450 million to property developers.

In the past, deals have included properties that have been problematic and required turning around. For instance, in 2014, Brookfield bought Unitech Corporate Parks (UCP) for ~2,034 crore. UCP was developing six infotech special economic zones in the NCR and Kolkata.

In 2016, Brookfield bought the 4.5 million sq ft commercial property portfolio of Hiranandani family in Powai area of Mumbai for about ~6,700 crore in the biggest commercial property deal in the country. It has also bought a business park that belonged to the Essar group in 2018.

In contrast, US-based Blackstone has invested over $5 billion in Indian properties, and now along with its partners, runs a commercial portfolio of over 100 million sq ft. It is presently involved in a JV with the Embassy group and rolling out the country’s first real estate investment trust or REIT.

Brookfield, which raised $15 billion for the global real estate this February, could put as much as 10 per cent of the funds into Indian real estate, Business Standard reported earlier. Those who track the sector say that Brookfield is more than likely to invest more money in Indian commercial properties in a bid to vie for deals that are aggressively being snapped up by global peer Blackstone.

 

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.