In one of the largest transactions in the commercial real estate segment in the country this year, Canada-based Brookfield Asset Management has agreed to buy nearly 4 million sq ft of office and retail assets of the Hiranandani Group in the Mumbai suburb of Powai for a deal that will be close to $1 billion, according to sources familiar with the development.
It is understood that the group is in the midst of structuring the assets that are in partnership between brothers Niranjan and Surendra Hiranandani, after which the formal announcement of the deal will be made.
“The company is structuring the assets under one entity, since they are in different partnership firms, so that they can be taken over by Brookfield,” a person with knowledge of the development told FE.
These commercial assets, which are fully leased, house offices of multinational corporations, IT firms and financial institutions.
Once the deal materialises, Brookfield will be closing its third deal in the real estate space in India. In 2014, the fund acquired 100% shareholding in four SEZs owned by Unitech Corporate Parks and a 60% shareholding in another two of its assets in India for over 205 million euros or R3,500 crore then. It also has a real estate fund in a joint venture with Mumbai-based developer Peninsula Land.
Brookfield, which has around $250 billion of assets under management globally, has been scouting for commercial assets in India for a while. Global funds like Blackstone, GIC, ADIA and QIA have been accumulating commercial assets over the last three years in the wake of real estate investment trusts regulations coming into force in India.
Indeed, the investor sentiment towards commercial realty sector has been on the rise. According to Anuj Puri, chairman and country head, JLL India, in H12016, the total of PE inflows into office realty has crossed the annual total seen in 2015. “It may even cross the previous five-year high seen in 2014,” he said in a recent note.