Hines broke ground on DNR Altitude in Bangalore during October of last year
Hines is expanding its pipeline of office projects in India with the US developer and fund manager having announced a second development venture with local builder DNR Group this past week.
Coming two years after the partners kicked off their first joint venture, DNR Nagavara will be built on an 11.3 acre (4.6 hectare) plot near an established software park in north Bangalore and, when completed in the fourth quarter of 2026, will add around 2 million square feet (185,806 square metres) of office space to the growing portfolio under Hines’ management in India.
“We entered the Bangalore office development business with DNR group in 2020 and today it has grown to be our largest project portfolio in the country,” said Amit Diwan, senior managing director and country head of Hines India. “Our partnership has laid the foundation for us to build another Class-A office project.”
This latest project comes just two months after Hines told local media in India that the firm plans to raise a fund dedicated to investing in office projects in the country, with the vehicle expected to attract $500 million in capital, according to an account the Economic Times.
Building in Tech Town
“The Nagavara project will be attractive to both built-to-suit and multi-tenanted options for our occupier partners,” Hines’ Diwan added, with the site located next to Bangalore’s Manyata Tech Park and Karle Town Centre overlooking Nagavara Lake. Financial details of the investment were not disclosed.
Amit Diwan has already started deploying capital from Hines new fund
Manyata Tech Park, an office development by India’s Embassy Group already provides desk space for more than 150,000 workers and is home to tenants including Cognizant, IBM, Rolls Royce, Nvidia, WSP and Fidelity Investments.
DNR will serve as the project owner and Hines the development manager for this second cooperative effort, with Bangalore-based DNR posing this latest project as an effort to create post-pandemic workplaces.
“We believe a local-global partnership provides unique benefits to tenants that neither can do alone as successfully.,” said DNR Group managing director Vipul Kumat. “With our joint experience, we will develop a world-class project to meet the needs of the occupiers in a post-COVID environment.”
Bigger Things
This latest development was announced less than six months after Hines and its partner broke ground on DNR Altitude, a 1 million square foot project in Bangalore’s Yeshwanthpur area which the partners launched in 2020. “We have had an excellent partnership in Yeshwanthpur with DNR and Hines creating what will be a best-in-class project in the location,” DNR’s Kumat said.
The two development projects will bring Hines office pipeline in the country to five projects spanning more than 12 million square feet. When completed, these properties would add to Hines’ two existing office assets in India, the One Horizon Centre joint venture with DLF and the Skyview Corporate Park cooperation with Shyam Telecom, both of which are in the National Capital Region city of Gurugram.
With those projects underway, Hines Diwan announced the company’s India office fund in February of this year, with that closed-ended vehicle expected to have a term of 10 years.
“The change in regulations and series of reforms related to Indian real estate over the last few years have provided us more confidence in the business environment here,” Diwn said in the Economic Times interview. “This is a good time to participate in Indian growth driven by the improving demographics, urbanization and policy reforms,” he added.
Hines first entered the India market in 2006 and is said to exploring additional office projects in Bangalore, Pune and Mumbai as it looks to deploy nearly half of the equity from its new fund during this year.
In June of last year, the company announced a 7 million square foot IT park project in Pune, east of Mumbai, through a joint venture with landlowner Goel Ganga Corporation.
More Desks Needed
The Houston-based firm is expanding its activity in India as the country’s office market looks poised to benefit from a tech sector which is expected to expand at a compounded annual growth rate of 10 to 12 percent annually over the five years from 2020 onward, to reach $300 to $350 billion in annual turnover by 2025, according to Indian IT trade industry organisation NASSCOM.
With that tech growth in motion, office leasing in India is project to expand by up to 14 percent this year, compared to 2021, according to research released last month by CBRE. The agency predicts that tenants will lease 45 to 47 million square feet of grade A office space in India during 2022 with technology service providers dominating that activity.
Just last week, the Canada Pension Plan Investment Board (CPPIB) announced that it is expanding its own office investments in India, as the pension fund manager revealed an INR 53 billion ($696 million) workplace joint venture with Tata Group.
Under that JV, CPPIB will take a 49 percent stake in a vehicle holding a pair of Tata office park projects in Chennai and Gurugram, with the venture targetting future projects in Mumbai, Delhi, Pune, Bangalore, Hyderabad and Chennai.
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