Ivanhoe Cambridge, Embassy Group Launch $500M Indian Office Platform

Indian developer Embassy Group and Ivanhoe Cambridge, a real estate investment arm of Canada’s second-largest pension fund, have launched a platform to fund acquisition and development of sustainable, office-led business parks in key urban centres of India.

Embassy will lead real estate development, project management, leasing and operations under the platform, while Ivanhoe Cambridge will leverage its expertise in investment, the partners said in a Tuesday press release. The platform will have investment capacity of $500 million from the two partners, with Ivanhoe Cambridge and Embassy respectively investing at an 80:20 ratio.

The seed asset for the platform will be the first phase of the 60 acre (24.3 hectare) Embassy East Business Park on Whitefield Main Road in Bengaluru.

“This new venture with Embassy will allow us to reinforce our presence in India, a key country in our diversification strategy in Asia,” said Karim Habra, head of Europe and Asia Pacific at Ivanhoe Cambridge, a division of Quebec province’s pension fund manager.

Long Rumoured

Tuesday’s announcement fleshes out further details of a deal mentioned in media accounts as far back as last August and reportedly signed last month by the two partners.

The platform will invest in develop-to-core and acquisition of partly developed business park opportunities to cater to the preferences of the millennial workforce in providing flexible workplaces and building sustainable communities, the partners said.

The first phase of Embassy East Business Park will be developed on a land parcel of nine acres, with a gross leasable area of 1.3 million square feet (120,774 square metres). The partners aim to create a mixed-use community offering co-living, essential retail and amenities to create a work-live-play experience for occupiers.

With its location in the growth corridor on ITPL Main Road, the development will have direct commuter access to the upcoming ITPL metro station, connecting the park to Bengaluru’s central business district.

The project will also provide access to social infrastructure, including a range of educational institutes, hospitals and hotels. The first phase is expected to be ready for occupancy by early 2024.

“Through the Embassy-Ivanhoe commercial office platform, we aspire to develop state-of-the-art business parks in India,” said Jitu Virwani, chairman and managing director of Embassy Group. “We aim to continue delivering a differentiated and holistic workspace ecosystem by integrating concepts like co-living and co-working, expansive office spaces and easy-to-access amenities.”

Land of the Giants

Founded in 1993, Embassy is one India’s largest real estate firms, possessing a broad portfolio of more than 62 million square feet of commercial, residential and industrial space.

The group is no stranger to joint initiatives with global investment giants, having sponsored the office-oriented Embassy REIT, India’ first listed real estate investment trust, with Blackstone Group, as well as the logistics joint venture Embassy Industrial Parks with Warburg Pincus.

Last month, India’s Economic Times reported that Blackstone had offered $700 million to purchase Embassy Industrial Parks and its 22 million square feet of logistics space.

For its part, Ivanhoe Cambridge has long sought to supercharge its Indian portfolio. President Daniel Fournier told Reuters in 2018 that the company wanted to more than double the $631 million it had committed to investment in India at the time.

A significant segment of the fund manager’s existing investment in India comes through its partnership with Logos Property, an logistics specialist controlled by Singapore’s ARA Asset Management.

In 2019 Logos spent $98.4 million to acquire a pair of logistics projects near Chennai, and the Sydney-based firm leveraged its relationship with Ivanhoe Cambridge in establishing its first presence in India in 2017.

Also in 2019, Ivanhoe Cambridge committed $250 million to a joint venture with Indian developer Piramal to establish residential-anchored smart cities.