Canadian real estate investment firm BentallGreenOak has entered into an agreement with Piramal Realty to acquire part of its commercial development Agastya Corporate Park in central Mumbai’s Kurla locality for more than Rs 1,000 crore, said two persons with direct knowledge of the development.
The deal marks the foray of BentallGreenOak, which is a part of Canadian financial services firm Sun Life Financial Inc, into India’s real estate investment sector.
“The term sheet for the transaction has already been signed and the deal is expected to be concluded in the next one month,” said one of the persons, who did not wish to be identified.
Piramal Agastya, spread over 16 acres on LBS Marg, is one of the country’s largest non-IT commercial developments, with a total project size of nearly 2 million sq ft. BentallGreenOak is buying 1 million sq ft, which has been completed and substantially leased.
French food products firm Danone, Aditya Birla Fashion and Retail’s Pantaloons, Piramal Enterprises, French sports goods retailer Decathlon and Piramal Learning University are among the key existing office occupiers here.
ET’s queries emailed to BentallGreenOak and Piramal Realty remained unanswered till press time. Transaction advisor CBRE South Asia declined to comment on the development.
In 2019, Sun Life Financial Inc had merged Bentall Kennedy, its North American real estate and property management firm which it had acquired in 2015, with GreenOak Real Estate, a global real estate investment firm with more than $11 billion in assets under management.
BentallGreenOak has more than $51 billion worth of assets under management across the world. Launched in 2012, Piramal Realty counts Goldman Sachs and Warburg Pincus among its investors. Goldman Sachs and Warburg Pincus, two international equity partners, have invested about $434 million in Piramal Realty at the entity level, which is the largest private equity commitment to Indian real estate at the company level.
The deal reinforces the continued interest of global institutional investors including private equity, sovereign funds, and insurance companies in Indian commercial real estate on the back of rapid urbanization, favorable regulatory norms, and high demand for residential and office premises across the country.
In 2019, India’s property sector attracted more than $5 billion in private equity inflows. Commercial real estate retained its top position and continued to be a preferred destination for global institutional investors in the backdrop of robust office space uptake, falling vacancy levels, and increasing rentals during the year.
In the first nine months of 2020, the country witnessed investments of $2.3 billion in real estate. In the past few weeks, Blackstone Group and Brookfield Asset Management entered into separate deals worth more than $1.5 billion and $2 billion for office assets portfolios of Prestige Group and RMZ Corp respectively.
The appetite for Indian realty among global institutional investors continues to be strong as indicated by major foreign funds like Blackstone, Brookfield, GIC, Xander, Ascendas, CPPIB, Warburg Pincus, and Goldman Sachs expanding their investments into the sector.
The BentallGreenOak and Piramal Realty transaction will lead to one more global institution entering the market chasing such commercial real estate assets in the country.