As a venture including Blackstone Group LP takes steps to launch India’s first real-estate investment trust, other foreign investors are also stepping up their activity in the country.
Institutions that have increased their buying lately include the Canada Pension Plan Investment Board and the Dutch pension fund manager APG Asset Management. Meanwhile, U.S. developer Tishman Speyer is finishing the third phase of a 2.5 million-square-foot office complex in Hyderabad, India.
The foreign investment mood today contrasts sharply with the end of the last decade when many big names were fleeing the country. Since then, demand has improved and real-estate values have increased.
When Tishman Speyer completed the first phase of its Hyderabad project six years ago, none of the space was preleased. “The market was not used to signing in advance for space that wasn’t sure to be delivered,” said Michael Spies, a senior managing director of the firm.
Tenants used to hesitate partly because developers typically built office buildings in stages selling off floors or even portions of floors to different tenants or investors. Increasingly, though, developers like Tishman Speyer have the financial ability to build and hold entire buildings in India.
Big tenants in the market are now getting more used to signing leases in advance. Apple Inc. and DBS Bank Ltd., of Singapore, both signed leases for the third phase of Tishman Speyer’s Hyderabad project within two months of construction starting in January and more than one year in advance of completion, Mr. Spies said.
Author: Peter Grant
Credits Wall Street Journal