Mumbai: Canada-based Brookfield Asset Management Inc. is set to acquire office and retail assets of Hiranandani Developers Pvt. Ltd in the Mumbai suburb of Powai at a valuation of close to $1 billion—one of the largest commercial real estate deals in recent years.
A spokesperson for Hiranandani Developers confirmed that the deal has been signed but said the transaction would still take about four to six months.
“The matter with Brookfield is closed. Transaction is closed in terms of understanding with them," said the spokesperson. However, the company is still going through a restructuring process to create a Special Purpose Vehicle (SPV), which would take about take four to six months, the spokesperson added, asking not to be named.
Hiranandani Developers is a partnership between Hiranandani siblings Niranjan and Surendra. The company owns around 5 million square feet of rent-generating office and retail assets at Hiranandani Business Park and Hiranandani Gardens in Mumbai.
Hiranandani Gardens, a 250-acre development, is the firm’s signature project and considered to be one of the best planned townships in India.
Mint reported on April 7 that Brookfield and another global investor had expressed intent, through two separate offers, to buy out Hiranandani’s office and retail assets.
In an earlier interview, Niranjan Hiranandani said that the company has been exploring various options to create value for these properties.
“We are in no hurry, but there are three opportunities for our office assets. We could look at a REIT (real estate investment trust), make a sale of our commercial assets or create a value proposition or stake sale at the project level," Hiranandani said.
India’s commercial office sector has seen strong growth in the past two years, despite a sharp slowdown in the residential segment.
Brookfield has been planning to significantly increase its real estate investments in India, on the back of a well-performing office market, residential sector and a huge demand for capital from developers.
The firm plans to invest in residential projects in top cities from its new $9 billion global real estate fund. These will be transactions in the range of Rs600-700 crore through the equity or preferred equity route. It is already exploring opportunities and is in active talks with developers.
Active investors in India’s commercial office space include the Government of Singapore Investment Corp. Pte Ltd (GIC), Ascendas Property Fund Trustee Pte Ltd, RMZ Corp. backed by Qatar Investment Authority (QIA), and Blackstone Group Lp.