New York-headquartered investment giant Brookfield Asset Management and Singapore's GIC have reached a mega strategic pan-India alliance to own and manage 5.5 million square feet of operating office assets in three cities, namely Mumbai, Hyderabad and Bengaluru, multiple industry sources in the know told Moneycontrol.
"Both the parties reached an agreement recently and the strategic partnership includes GIC picking up a stake in Equinox Business Parks, which is located off BKC, Mumbai," said one of the persons above.
According to a second person, "Brookfield has contributed its 100 per cent owned asset Equinox to seed this alliance while GIC has brought in their 100 per cent owned assets, Bengaluru's Bhartiya City and Hyderabad's Aquila. The Canadian investor will manage these investments and the properties going forward."
"The combined asset value of the three assets is approximately $1bn, " a third person added.
"Since the buyout from the Essar Group in 2018, Brookfield has turned around Equinox and its value has increased to around Rs 4,000 crore ($453 mn) from the original acquisition price of Rs 2,400 crore," the third person added.
All the three persons above spoke to Moneycontrol on the condition of anonymity.
In response to an email query from Moneycontrol, Brookfield Asset Management declined to comment. An email query sent to the media team of GIC via its website remained unanswered at the time of publishing this article. This article will be updated as soon as we hear from the firm.
Post this latest alliance, Brookfield and GIC have sealed deals worth nearly $2.5 bn in India.
In May 2023, Brookfield India REIT and GIC joined hands earlier to acquire Candor Techspace G1 and Downtown Powai in a deal valued at $1.4 bn. The two large commercial assets (totaling 6.5 million square feet) were acquired from Brookfield Asset Management’s private real estate funds in an equal partnership. This marked the first-of-its-kind partnership In India between a listed REIT and a global institutional investor.
Recently, market regulator Sebi reclassified "REITS" or " real estate investment trusts" as "equity" for investments by mutual funds, in a move likely to bolster the instrument and overall investor participation.
Brookfield India Real Estate Trust, which made its public market debut in February 2021 is sponsored by Brookfield Asset Management and calls itself "India's only 100 per cent institutionally managed office REIT" .
The REIT manages 10 Grade A assets located in Delhi, Mumbai, Gurugram, Noida and Kolkata. Its portfolio consists of 29 mn sf of total leasable area, comprising 24.5 mn sf of operating area, 0.6 mn sf of under construction area and 3.9 mn sf of future development potential.
A closer look at the 3 assets in the big-bang alliance
Equinox, a 10-acre campus-style development adjacent to BKC, with 1.3 million square feet of office space, operates 100 per cent on renewable energy, as per its website. Some of its tenants include the likes to Tata Communications, State Street, Mirae Asset Management, NSE and Titan.
According to report by the Economic Times, in February 2022, GIC held discussions with the Bhartiya Group to invest Rs 2,800 crore in a deal which would see it picking up 3 million sq ft of commercial assets in Bhartiya City, a 125-acre township project.
Later in May 2023, GIC acquired an IT-SEZ spread over 1.1 million sq ft in Hyderabad from the Phoenix Group for Rs 1,050 crore .
"The entire development, known as Phoenix Aquilla, consists of two towers spanning 1.8 million sq ft. The first tower, covering 700,000 sq ft, has already been completed and leased," an Economic Times report said.
Brookfield in India
In May, Connor Teskey, President of Brookfield Asset Management said the firm is targeting its assets under management (AUM) in India to grow to $100 billion in the next five years, during a media interaction in Mumbai.
Recently, in a key move at Brookfield Asset Management, Aditya Joshi, Managing Partner, Private Equity and Head of India was elevated as the Head of Private Equity for the Asia-Pacific region.
In August, Moneycontrol reported that wealth and asset management firm 360 ONE Asset had acquired a 50 percent stake from Brookfield Asset Management's private real estate funds in the Bluegrass Business Park office-and-retail development in Kalyani Nagar, Pune, for a consideration of Rs 2,400 crore.
Earlier in the year, the Canadian global investor and its affiliates sold 1.6 Giga Watt (GW) portfolio of solar and wind assets in India to Malaysian clean energy company Gentari, the New York-headquartered firm said in a statement on March 5.
FAQs
Who steers Brookfield's realty strategy in the region?
Ankur Gupta is Deputy Chief Investment Officer of Brookfield’s Real Estate Group, assisting in global investment decisions. He is also the Head of Asia Pacific and Middle East for the Real Estate Group.
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