GIC in talks to buy ICICI Ventures stake in Hyd project

Written by Shubhra Tandon | Shruti Ambavat | Mumbai | Updated: Dec 7 2013, 10:15am hrs
GIC, the sovereign wealth fund from Singapore, is in advanced stages of discussions with ICICI Venture to buy out the latters 50% stake in WaveRock, a marquee IT park in Hyderabad, sources familiar with the development said.

ICICI Venture had invested R250 crore in the property in 2006-2007. Other leading global funds like Blackstone and Morgan Stanley had also evinced interest in the property in the past, a source familiar with the development told FE.

A joint venture between ICICI Venture and US-based Tishman Speyer, WaveRock is being developed under TSI Business Parks. It is slated to be a 2.5-million-square-feet project located in Nanakramguda, close to an upcoming IT corridor of Gachibowli, in Hyderabad. WaveRock is being developed as part of a state-of-art IT/ITeS special economic zone campus, expected to serve over 20,000 professionals. Some of the marquee tenants in WaveRock include Tata Consultancy Services (TCS) and Accenture.

Market estimates suggest that currently the lease rentals in Grade-A buildings

in Nanakramguda-Gachibowli area are in the range of R32-40 per square feet per month.

The first phase of 0.7 million square feet called Bar Building became operational in February 2010 and is fully leased out, while the second phase of WaveRock is under development, according to Tishmans website.

Tishman Speyer is owner, developer, fund manager and operator of real estate across the US, Europe, Latin America, India and China. Its global portfolio of $64.8 billion spreads across 356 projects totaling over 123 million square feet. In 2005, Tishman developed TSI Ventures in India, becoming the first US real estate company to create a pan-Indian real estate company that develops Class A properties in the country.

Emails sent to GIC, Morgan Stanley and Tishman Speyer, remain unanswered till the time of going to press.

Investor interest in the leased office buildings has been increasing over the past few years with the sector contributing 53% of the overall investments in 2013, compared with 36% and 30% in 2012 and 2011, respectively, says a latest report from international property consultants, Cushman & Wakefield.

The total value of investments in the office segment for the first three quarters of 2013 was recorded at R2,476 crore ($397 million), which is more than double that of the same period in 2011 and 2012. There is a preference for investments in leased office spaces with over R7,667 crore ($1.46 billion) invested in the segment since 2011, says Cushman & Wakefield.

Some of the marquee deals in office space include Blackstones $200-million investment in portfolio of three business parks of Bangalore-based Embassy Group in 2012.

In July 2013, Singapore-based Ascendas Trust invested $110 million in Hyderabad Phoenix Groups commercial asset, while Maple Tree bought out 2 million square feet from Assetz Global Technology Park for R800 crore last year.

Hyderabad as a commercial market has seen 3.5-3.8 million square feet of absorption, which is similar to that of last year. The companies already having a presence in the city continue to expand, while not many new companies are seen to enter the city, Knight Frank (India) director (occupier solutions) Viral Desai said.

As for the valuations of office assets, Desai said that office valuations across India are at the lowest and are being seen as posing lucrative investment opportunity to investors.