Hines, the Houston-based real estate firm with over $133 billion in assets under management across 205 cities globally, said Friday it has partnered with India’s DNR Group to build an office development in Bangalore.
The 20-storey tower will have a built-up area of one million square feet (92,903 square meters) when completed in 2023, Hines said in a statement. Groundbreaking for the project, which is currently in the design stage, is slated for the first quarter of 2021, the company said.
Hines, which is present in 24 countries, has been actively investing in India where it currently has over $1.5 billion of assets under management. These include the One Horizon Centre and Skyview Corporate Park commercial properties in Gurgaon where it is developing Elevate, a premium residential complex, in partnership with Conscient Infrastructure.
Emerging CBD Alternative
The project will be built on DNR’s four acre commercial site in Yeshwantpur, a rapidly developing corridor and an emerging alternative to Bangalore’s central business district. The site has connectivity to public transportation facilities such as the metro.
“We have been open to entering Bangalore with the right partner, and only on a land parcel with the right characteristics,” said Amit Diwan, managing director and country head at Hines India. “The city has the deepest institutional office market in India, and we are keen to add an exceptional Grade-A office project.”
Hines, which will manage the project’s development for DNR, said construction cost will be determined once the design is finalized.
Global Investor Demand
International developers have been making inroads into Bangalore, drawn to the city’s booming technology industry. The city is home to some of India’s biggest technology companies such as Flipkart, Infosys and Wipro as well as international companies including IBM, Goldman Sachs and Microsoft.
In October 2018, Keppel Land’s Indian joint venture bought a 3.09 hectare site in Bangalore for INR 10.4 billion ($139.3 million) in what would be its first-ever commercial property project in the country. Earlier that year, Singaporean sovereign wealth fund GIC was reported to be buying an office portfolio in Bangalore for $200 million.
With vacancy rates falling to 8.2 percent in 2019, Colliers International expects office rents in the city to increase 3.2 percent on a compounded annual growth rate basis in the four years through 2024, the real estate broker said in a report released in January. Demand in Bangalore is primarily driven by research & development facilities of IT companies as well as back-end offices of online retailers, according to Hines.
Post COVID-19 Recovery
Despite the economic fallout from the COVID-19 pandemic, Hines believes demand will return. “In the near-term, there is uncertainty of the net impact between the benefits of de-densification and reduction in space requirements due to remote working. However, there is certainty of flight to quality and that’s what we’re looking to tap,” Hines said in a statement to Mingtiandi.
Monish Krishna, senior director and head of commercial business at Hines India expressed confidence that the company can deliver an iconic project in Bangalore. “We are well positioned to bring a future-proof office experience based on our global knowledge that would meet requirements of occupiers in a post COVID-19 era,” Krishna said.
The US developer entered India more than a decade ago. In 2007, it established a $300 million fund to jump start projects in the country. Construction of One Horizon Centre started in 2012 and was developed in partnership with local real estate giant DLF.
Last year, the company set up its Asia Pacific headquarters in Hong Kong, underlining its long-term commitment to the region. The firm also has offices in Australia, Beijing, Shanghai, Seoul and Tokyo.