Brookfield Reit, Prime Offices Fund to buy BKC office space for ₹1700 crore

Bengaluru: Brookfield India Real Estate Trust (BIRET) and Prime Offices Fund have signed binding agreements to acquire office space in Mumbai's Bandra-Kurla Complex (BKC), a prime business district, for an enterprise value of ₹1,700 crore.

Prime Offices Fund is a commercial real estate-focused fund managed by Nuvama and Cushman & Wakefield Management Pvt Ltd (NCW) through a partnership.
BIRET and Prime Offices Fund, in an equal partnership, will acquire the 264,000 sq ft Grade A front office space that comprises three contiguous office floors, located in BKC's G Block.

The office space will be acquired from Brookfield's private real estate fund. Brookfield will continue to oversee and manage the property.

Brookfield Reit and Prime Offices Fund said in a joint statement that the office space is leased to blue-chip tenants from financial services, real estate, and technology.

“The institutional-quality office space in BKC is positioned in one of India’s most established commercial markets and offers a differentiated combination of a quality tenant base, strong occupier demand, connectivity and sustained rental growth, which is difficult to replicate," Shashank Jain, chief executive and managing director, Brookfield India Real Estate Trust, said in the statement.

“Its addition will further diversify and strengthen Brookfield India Reit’s portfolio while deepening our presence in Mumbai. This reflects our disciplined approach to adding premium, accretive assets and creating long-term value for our unit holders,” Jain added.

Property advisory JLL India was the transaction advisor.

A Reit is a trust that owns a pool of income-generating commercial real estate assets, such as office parks and shopping malls, held in a special purpose vehicle (SPV). It generates revenue by leasing out these properties and collecting rent from tenants.

“This acquisition marks an important milestone in our portfolio strategy, providing us with a foothold in Mumbai through BKC – India’s leading front office market," said Gaurav Puri, chief investment officer, NCW. "BKC’s sustained growth and resilient occupier demand make it a strategically important micro-market and a natural fit for our investment strategy.”

NCW recently said it had achieved the final close of Prime Offices Fund at ₹4,000 crore.

BIRET on Monday reported a 51.74% year-on-year rise in net operating income to ₹756.6 crore in the April-June quarter, on the back of higher lease rentals. The Reit has done gross leasing of 1.1 million sq ft during the period. It declared a distribution of ₹5.6 per unit for the quarter.

Brookfield is one of the five listed office Reits in the country. The other four are Mindspace Business Parks REIT, Embassy Office Parks REIT, Knowledge Realty Trust and Bagmane Prime Office REIT. Nexus Select Trust is the only listed retail Reit.

Last November, Brookfield Reit said it had entered into a binding agreement to acquire a 100% interest in Ecoworld, a 7.7 million sq ft Grade A office campus spread over 48 acres in Bengaluru's Outer Ring Road, for ₹13,125 crore, in the largest transaction by a real estate investment trust.

The acquisition marked its entry into one of India’s strongest office markets, Bengaluru, expanding the size of the REIT considerably, and positioning it as a pan-India platform.

BIRET raised ₹2,600 crore through a qualified institutional placement in April, and has 37.2 million sq ft of total leasable area across 11 Grade A assets in Delhi, Mumbai, Bengaluru, Gurugram, Noida and Kolkata.