Brookfield Agrees to Buy $1B in Indian Commercial Assets

Brookfield Asset Management continues to bet on India’s property sector as the Canadian investment firm has reportedly agreed to pay Rs 67 billion ($1 billion) to buy 4.5 million square feet (418,000 square metres) of prime commercial space from a company belonging to one of India’s wealthiest entrepreneurs, according to reports in the Indian media.

The deal is said to be the largest purchase of commercial assets in Mumbai to date, as international investors, including Blackstone and GIC, as well as China’s Fosun and Dalian Wanda, increasingly turn to the subcontinent for high growth opportunities.

Brookfield had been said to be battling with GIC for control of the prime commercial portfolio, however, the Singaporean sovereign wealth fund has now reportedly withdrawn its bid.

Mumbai’s Largest Commercial Deal

The portfolio of retail and office space was developed in the Mumbai suburb of Powai by the Hiranandani Group, a real estate developer controlled by billionaire Niranjan Hiranandani and his brother Surendra.

“People are talking about big projects. Hiranandani deal may be the largest in Mumbai in commercial space,” Shobhit Agarwal, managing director for Capital Markets at JLL India was quoted as saying in The Hindu.

Japan’s Nomura Group, Deloitte Consulting and Tata Consultancy are among the big name tenants leasing space in the Powai portfolio, with reports indicating that the set of commercial buildings are fully leased. The preliminary agreement was reportedly signed on Thursday and is expected to be concluded within four to five months after the assets are transferred into a separate corporate entity. At the time of publication, neither Brookfield nor Hiranandani had commented publicly on the transaction.

Brookfield Makes Follow-Up Bet in India

The deal with Hiranandani is Brookfield’s second major property investment in India, and the latest of several moves by the asset manager in the subcontinent.

In 2014 Brookfield agreed with Unitech Corporate Parks to pay $525 million for a subsidiary of that Indian developer which held 100 percent of four special economic zones and 60 percent of another two of the office park developments. Brookfield later went on to buy out the remaining 40 percent equity in the two remaining projects.

The Canadian firm also got involved in Indian infrastructure just over a year ago, buying six road and three power projects from India’s Gammon Infrastructure Projects in a joint venture with a fund controlled by India’s Kotak Mahindra Capital. In July of this year Brookfield Asset Management also signed a preliminary agreement to buy about $1 billion in Indian distressed assets through a joint venture with the largest lender in the South Asian nation.

Brookfield finds itself in good company among Indian real estate investors, with Blackstone, which has also invested aggressively in the country’s property market, reportedly readying India’s first real estate investment trust.

Chinese real estate investors and developers have also begun turning their attention to India, with Dalian Wanda chairman Wang Jianlin meeting Indian prime minister Narenda Modi in June to talk property deals. The Chinese tycoon said following that meeting that Wanda may invest in projects worth an eventual $10 billion in India. And just last month reports in the Indian press indicated that Guo Guangchang’s Fosun Group was preparing its own $1 billion real estate investment platform in the country.