GIC, Brookfield REIT Form JV to Buy $1.4B in India Office Assets

Singapore sovereign wealth fund GIC has formed a 50:50 joint venture with Brookfield India REIT to buy two commercial assets held by funds managed by the latter’s sponsor, Brookfield Asset Management, with a combined enterprise value of $1.4 billion.

The acquisition includes properties in Brookfield’s Downtown Powai in Mumbai and Candor TechSpace Sector 48 in Gurugram, spanning 6.5 million square feet (603,870 square metres) of commercial space, the JV partners said Thursday in a release.

The deal by the Singaporean fund and the Canadian investment giant is being characterised as a first-of-its-kind partnership in India between a global institutional investor and a listed REIT.

“We are pleased to partner Brookfield India REIT as Brookfield is a leading market player with a strong track record in India,” said Goh Chin Kiong, deputy chief investment officer of real estate at GIC. “In addition, this marks our first joint venture with a public REIT in India and will allow us to scale up our investments through this avenue. We look forward to adding value to the assets, which are well-located within key gateway cities.”

Trust’s Upscaled Portfolio

Situated near Mumbai’s Powai Lake, Downtown Powai is a portfolio of nine commercial properties spread across three clusters and totalling 2.7 million square feet of operating area and 100,000 square feet of area under expansion. The district’s Kensington office park was the headline seed asset of Brookfield India REIT when the trust went public in a $520 million IPO in 2021.

The Downtown Powai assets were acquired by Brookfield through a 2016 deal in which the firm reportedly spent $1 billion to buy commercial space from a developer controlled by billionaire Niranjan Hiranandani and his brother Surendra.

Brookfield India REIT already owns four assets from the Candor TechSpace portfolio across the cities of Gurugram, Noida and Kolkata. Brookfield acquired the portfolio in 2014 when it agreed to pay $525 million for a Unitech Corporate Parks subsidiary that held 100 percent of four special economic zones and 60 percent of two office park developments. The Canadian firm later bought out the remaining 40 percent equity in the latter two projects.

Candor TechSpace Sector 48 in Gurugram comprises 12 completed buildings totalling 3.7 million square feet of operational area with 75 percent committed occupancy and a weighted average lease expiry of 6.7 years.

Brookfield India REIT’s new properties will increase the gross asset value of the trust to $3.5 billion and the net asset value to $2 billion, while effecting a 35 percent increase in total leasable space and a 44 percent increase in operating area.

“Growing and diversifying our India REIT portfolio via accretive transactions is part of our long-term strategy,” said Ankur Gupta, managing partner and APAC head of real estate at Brookfield. “We are excited about the addition of market-leading properties and the meaningful increase in size of the REIT.”

Comings and Goings in India

The half-stake in the Brookfield assets is GIC’s latest announced acquisition in India after the $690 million sovereign fund recently bought an IT office park in Hyderabad.

GIC acquired the 1.1 million square foot tech park in Gachibowli locality from the Phoenix Group for INR 1,050 crore ($127 million), insiders told the Economic Times.

The Indian newspaper also reported last week that realty major Runwal had bought out GIC’s entire 50 percent stake in their joint retail property R City Mall for INR 1,000 crore ($121.8 million). The Singaporean fund’s exit from the Mumbai shopping centre was said to have brought a return of more than 4 times.