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India investments by Brookfield and Blackstone hit $20 bn mark

Mega investments in the real estate sector dominate long-term bets placed by the Canadian, US firms

Canada’s Brookfield Asset Management Inc. and New York-based Blackstone Group Lp have both reached the $20-billion investment milestone in India, as they continue to take long-term bets on real estate and other sectors.

Of the $20 billion that Brookfield has invested in India over the past decade, around $7 billion went into real estate, as the firm placed large bets on acquiring assets of property developers.

In 2020 alone, the Canadian investor pumped in nearly $11.5 billion. This included the Reliance Jio Infratel Pvt. Ltd acquisition along with its partners and Singapore’s GIC Pte Ltd for an investment value of $7.6 billion.

Separately, in the largest real estate transaction in India, Brookfield bought 12.8 million sq. ft of Bengaluru-based RMZ Corp’s 128 million sq. ft of office and co-working portfolio for $2 billion.

The alternative asset manager is now gearing up to launch its flagship real estate investment trust or Reit to raise around ₹4,500 crore as soon it gets regulatory approvals.

Blackstone, which has been investing in the country longer than Brookfield, last year bought Piramal Glass Pvt. Ltd at a billion-dollar valuation, and signed a $1.5 billion deal with Prestige Group to buy the latter’s office and retail assets for $1.5 billion.

It is also in the process of buying out the mutual fund business of L&T Asset Management Co. in another billion-dollar deal, as it looks to bolster its investments in the financial services space.

“Deal activity in commercial real estate, namely office, in 2020 has not only been the highest but transaction sizes have also changed, and become bigger," said Shobhit Agarwal, managing director and chief executive officer, Anarock Capital.

“The impact of the first Reit listing in 2019 was truly felt last year, as it indicated the opening up of a new investment cycle. Reits are a reality now and we expect retail participation to further go up in the upcoming listings," he added.

Brookfield and Blackstone didn’t respond to queries.

From buying out commercial office and retail assets, the focus is also gradually shifting to consolidating their assets into Reits.

Blackstone along with Embassy Group launched India’s first Reit in 2019, and then, the former partnered K Raheja Corp to list the Mindspace Reit last year.

“Blackstone has so far worked in partnership with various developers and co-owns several assets, unlike Brookfield which fully owns and manages its properties. But that is changing.

Blackstone is now scaling up Nucleus Office Parks, an entity that will house its fully-owned rental properties under a single platform," said a person familiar with the development, on condition of anonymity.

Agarwal said that large global investors will also be looking to invest in data centre companies in the country.

Data centres have emerged as an alternative real estate asset class with the focus shifting to large hyperscale developments.

Around $9.5 billion of capital is in various stages of being announced, committed or waiting to be committed into Indian data centres, according to a recent Anarock-Mace report.

India will see at least 28 large hyperscale data centres constructed over the next three years, it said. “The growth in data centres will be led not just by developers but large corporates, and investors will be attracted to this asset class," Agarwal added.

Data centres house computing infrastructure like servers, routers, switches, and firewalls, apart from supporting paraphernalia.


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