With US investors going slow on the 700 million square feet (sq. ft.)Indian property market, Singaporean investors and property developers have stepped in to take advantage of the lower competition and a spate of good deals.
Ballpark estimates, based on their announcements, show that they are looking to invest about $ 8 billion (Rs 66,400 crore) in Indian properties.
While Singaporean sovereign fund GIC is doing big deals in office properties, other investors such as CapitaLand Keppel Corporation’s real estate arm Keppel Land and Mapletree are launching new funds and developing new properties.
For instance, GIC is in the final lap to buy the Waverock property owned by Shapoorji Pallonji group and Allianz Real Estate in Hyderabad for Rs 2,200 crore. In May this year, it joined Brookfield India REIT to acquire two large commercial assets, totaling 6.5 million sq. ft, from Brookfield Asset Management in an equal partnership for a valuation of $ 1.4 billion.
GIC was also in the race to buy the warehousing assets of ESR Allianz which finally went to Blackstone, sources said.
“They (Singaporean investors) are getting good pricing as others are not active. There is not much competition,” said Shobhit Agarwal, managing director at Anarock Capital.
Unlike US markets, Singaporean markets are on a rise, Agarwal said, Sanjeev Dasgupta, chief executive, at CapitaLand Investment India agreed with Agarwal. “It does appear that there is greater interest in India this year from Asian investors. Investors in the West are said to be more focused on managing their existing investments in Europe and US,” Dasgupta said.
CapitaLand Investment aims to double its portfolio to 50 million sq. ft. in the next 4-5 years, he said. CapitaLand currently has an operational portfolio of 29.7 million sq. ft. across business parks, industrial and logistics parks.
It also has over 11 million sq. ft. of office space under development across 6 cities – Bangalore, Chennai, Hyderabad, Pune, Mumbai and Gurgaon. Its logistics platform – Ascendas Firstspace will invest in key warehousing and manufacturing hubs in six major cities, as well as in emerging markets, he said.
It is also building four data centres: one each in Navi Mumbai and Chennai, and two in our International Tech Parks in Bangalore and Hyderabad with a combined capacity of over 200 megawatts. A month ago, it announced that it is launching a business park development fund, CapitaLand India Growth Fund 2, with a target fund size of S$525 million (₹3,261 crore) to invest in Grade A business parks in India.
Keppel Land, part of Keppel Corporation is also looking to launch a India property fund and registered with Sebi for the same. The investor cum developer has been acquiring and investing in Indian properties for some time. Apart from office properties, it also invests in residential properties.
“India is a market where we are looking to expand in. We are currently working on an Indian strategy mandate and are on the lookout for opportunities.” a Keppel spokesperson said.
Another Singaporean investor/developer Mapletree is also looking to double its portfolio in the next three years, said a source in the know.
“Since Singaporean investors entered Indian real estate , they have always increased investments and I feel it will only go up,” said a senior executive at a Singapore based investor.
According to industry-watchers , most of the US funds such as Blackstone, Warburg Pincus are going slow on office properties now.
After Blackstone bought the commercial portfolio of Prestige group for Rs 9160 crore in 2021, it has not made any major deals in Indian office properties. However, Blackstone is building its logistics property platform.
“Due to slow down in the US and change in workplace dynamics, the US market is going through significant stress with increasing vacancies and slowing real estate demand, ” said Piyush Gupta, managing director, capital markets & investment services, at Colliers India.
“Hence Investors are facing redemption pressures resulting in slowing down on large fresh commitments and liquidation of portfolios in emerging markets,” Gupta said.
However he added that most of the Investors continue to have a positive view to invest in India. “A large part of global investment in India has come from Americans and Canadians including three out of four listed REITs in India are sponsored by Western Investors,” Gupta added.