Brookfield to buy Hiranandani property for $1 bn in Mumbai’s Powai

In signs of increasing foreign investor interest in th eIndian property market, Canada's Brookfield Asset Management is acquiring 4 million sq ft of office and real estate space from Mumbai-based Hiranandani Group in a deal estimated at $1 billion (Rs6,700 crore) - the largest commercial property deal in the country.

The deal is part of a restructuring of assets within the group, which is a partnership between brothers Niranjan and Surendra Hiranandani, and a formal announcement of the deal will be made after the restructuring is finalized.

"It is part of succession planning in the family as brothers are pursuing their own interests," a Hiranandani spokesperson said confirming the development.

Hiranandani group, a 50:50 partnership between Niranjan and Surendra Hiranandani, still owns 0.5 million sq ft of office space in Powai and is developing 3,000 apartments in the suburb. The group is developing 5 million sq ft of office space across the country.

These commercial assets, which are fully leased, house offices of multinational corporations, IT firms and financial institutions and are in different partnership firms and these can be taken over by Brookfield, sources pointed out.

Once the deal materialises, Brookfield will be closing its third deal in the real estate space in India. In 2014, the fund acquired 100-per cent stake in four SEZs owned by Unitech Corporate Parks and a 60-per cent stake in another two of its assets in India for a total of over 205 million euros (Rs3,500 crore).

Besides, Brookfield has a real estate fund in a joint venture with Mumbai-based developer Peninsula Land.

Brookfield, which has around $250 billion of assets under management globally, has been scouting for commercial assets in India for some time.

Other major developers such as DLF, K Raheja Corp, Prestige and others are also looking to raise a combined $3.5 billion from selling stake in their office space assets.

Meanwhile, among investors, Blackstone has invested over $3 billion in office properties and GIC invested more than $1 billion while Canada's CPPIB has signed a venture with Shapoorji Pallonji group to invest in office projects. It has also bought an IT park in Chennai.

According to property consultant Colliers, the Indian office market remained strong in the second quarter of 2016 with absorption of 10.4 million sq ft of office space, taking the total to 19.2 million sq ft year-to-date.