US-based international real estate firm Hines has entered into a long-term strategic partnership with realty developer Goel Ganga Corporation to develop a large IT park in Pune’s Kharadi locality, in one of the largest commercial real estate alliances since the Covid-19 outbreak.
The entire 7 million sq ft office space development will be spread over a 43-acre land parcel in Pune’s secondary business district East. The first phase of the project will be spread over 2.4 million sq ft.
Hines, which oversees a portfolio of assets under management valued at around $161 billion, will be foraying into the Pune office property market with this partnership.
“We are excited to enter the Pune office market with Goel Ganga Corporation,” Amit Diwan, managing director and India country head at Hines, told ET. “We share the same long-term vision and belief that this project will become an ideal office of choice for future tenants. Pune has a deep institutional office market, and we are thrilled to be adding a future-proof asset to the market.”
The alliance indicates unabated appetite among global institutional investors for office properties in India despite the noise around hybrid and work-from-home models in the backdrop of the ongoing pandemic.
“We have believed in creating landmarks in residential real estate development in the past four decades by delivering nearly 30 million sq ft,” said Amit Goel, CMD at Goel Ganga Corporation. “Now, on our new vision to create a benchmark in commercial, IT, ITES assets of over 20 million sq ft, we are delighted to partner with Hines on this project to create the benchmark, similar to the ones they have created in other parts of India and worldwide.”
The first phase of the project is expected to be completed in 4-5 years, while the entire project is estimated to be developed in 10 years.
“The Kharadi market remains a location of choice and occupiers want high quality campuses, which Hines can build on Goel Ganga’s land, so it’s a synergistic partnership,” said Saurabh Shatdal, managing director-land & capital markets, India Cushman & Wakefield, which acted as the transaction advisor.
The Pune-based developer will handle approvals and financial closure, while Hines will be responsible for the masterplan, design, construction, leasing and asset management of the project.
The said land parcel is located in SBD East sub-market of Pune that has more than 50% stock of total Grade A office in the city and amongst the lowest vacancy rates.
This micro-market witnesses the highest absorption annually and is also one of the fastest growing office markets with existing major banking, financial services and insurance (BFSI), IT and ITES occupiers.
Institutional investors have continued to show interest in Indian real estate market in 2020 with a total capital inflow of $5 billion, which is equivalent to over 90% transactions witnessed in the previous year, despite a sudden halt brought on by the pandemic, showed a recent report.
The uncertainty over income and yield stability of commercial properties due to the pandemic had led to pull back in investments. However, large global funds have rather used this as an opportunity to negotiate portfolio deals with developers who offered quality rent yielding assets in cities with a high-quality tenant profile.