Brookfield Asset Management, One Of World's Largest Real Estate Investors Just Bought A Mumbai Property For $1 billion

Brookfield Asset Management, one of the world's largest property and infrastructure investors, is set to buy the commercial real estate assets, mostly tenanted office buildings, of Hiranandani Developers in Powai near Mumbai for $1 billion (approx Rs 6,700 crore).

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The Canadian asset manager is weeks away from acquiring 100% ownership of the 4.5 million-sq-ft business park, making it the single largest commercial property acquisition in the country, two people directly familiar with the matter said.

India's biggest property deal

The deal would help brothers Niranjan and Surendra Hiranandani monetize their marquee commercial assets, riding on the global investor appetite to own office properties with stable yields in Asia's third-largest economy .

Brookfield pipped other potential suitors (Canadian Pension Plan Investment Board and Blackstone ) with an aggressive offer to chase down its third Indian buyout deal, after snapping up Unitech Corporate Parks and Gammon's road and power assets.

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When contacted, Brookfield declined to comment. Niranjan Hiranandani was unavailable for comment.

Sought after property

The fully developed Hiranandani business park in Powai, one of the hottest suburban business districts in the country's financial capital, houses offices of the top Indian and MNC corporations.

The new owner of the business park will have a chance to reset the office rentals as tenancy rights start coming up for renewal in the near future, probably explaining Brookfield's aggression on the deal making.

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Hiranandani had embarked on restructuring the partnership firm, holding the commercial assets into a corporate entity in a bid to explore strategic options. A recent media report also speculated about multiple investors prospecting a deal with Hiranandani.

Macquarie Capital is advising Hiranandani on the Powai transaction, while Nomura is helping Hiranandani on a separate sale process for its upcoming business park in Thane, where Tata Consultancy Services has committed to a 2 million-sq-ft office space deal.

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India's services led economy is the fastest growing in the world and has thrown up a stable market for income-generating commercial real estate, giving investors a chance to list these assets through real estate investment trusts (REITs). These trusts are listed entities holding income generating real estate assets from which earnings are distributed to shareholders.

Sebi came out with REIT guidelines two years ago to help real estate and infrastructure developers list their rent-yielding assets, and provide large and small stock market investors with an inflation-indexed product.

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Sebi came out with REIT guidelines two years ago to help real estate and infrastructure developers list their rent-yielding assets, and provide large and small stock market investors with an inflation-indexed product.

Bulge-bracket investors such as Blackstone, Qatar Investment Authority , Goldman Sachs and GIC of Singapore are among those bulking up their Indian office space portfolio in recent years