MUMBAI: In India’s largest deal so far in the commercial property space, Canada-based Brookfield Asset Management is set to acquire Hiranandani Group’s offices and retail space in Powai, Mumbai, for around $1 billion, or about Rs 6,700 crore, two people familiar with the development said.
Hiranandani Group, a partnership between Hiranandani brothers Niranjan and Surendra, owns 4.5 million square feet of office and retail space in Powai, developed over more than a decade. “The deal is expected to be concluded soon,” one of them said. “The process to restructure Hiranandani brothers’ partnership firm is already at an advanced stage and this will clear the way for the transaction,” the person said.
The developer is currently in the process of restructuring the partnership firm that holds Powai assets into a corporate entity. The move was seen as a precursor to either listing of a Real Estate Investment Trust that would hold the office assets or stake sale.
However, according to media reports, Niranjan Hiranandani’s daughter Priya Vandrevala had recently moved the Delhi High Court against her father and her brother Darshan Hiranandani to restrain them from diluting their stake in the partnership firm.
An email query to Brookfield Asset Management remained unanswered as of press time on Tuesday. A Hiranandani Group spokeswoman replied with “no comments”. Hiranandani’s Powai offices are fully leased and big tenants include Tata Consultancy Services, Nomura Group and Deloitte Consulting India.
Brookfield Asset Management, a global alternative asset manager, has been active in India in recent times. In 2014, it acquired 100% stake in four special economic zones owned by Unitech Corporate Parks (UCP) and 60% stake in its two other assets in the country for Rs 3,500 crore. It had bought the entire stake of Candor Investments, a subsidiary of London Stock Exchange-listed India-focused realty investment firm UCP. Subsequently, it went on to acquire the remaining 40% in the two other properties. Foreign investors’ appetite for Indian real estate is on the rise owing to relatively better economic growth and therefore returns. Sovereign funds, pension funds and large public institutions have been entering the market through acquisitions.
Institutional investors including Blackstone Group, Singapore’s sovereign fund GIC, Canada Pension Plan Investment Board (CPPIB), Goldman Sachs and Qatar Investment Authority have been investing in Indian realty assets for the last few years. The country witnessed around $2.3 billion, or about Rs 15,000 crore, poured into the sector by foreign private equity firms in the year 2015, as per a Knight Frank estimate.
Credits ET Realty