Hines Plans India-Dedicated Fund to Invest in Office Properties

Hines Plans India-Dedicated Fund to Invest in Office Properties

Global real estate investment and development firm Hines is looking to scale up its India exposure with a plan to raise a fund dedicated to investments in office properties in the country in the backdrop of a series of reforms improving the business environment, said a top official of the company.

The US-based firm is planning to raise the India-dedicated fund worth $500 million in the next two quarters as part of its growth strategy. This will be a close-ended fund with a total tenure of 10 years.

Hines India is planning to commit nearly half of this fund in the first year itself and has already started exploring investment opportunities for this.

“The change in regulations and series of reforms related to Indian real estate over the last few years have provided us more confidence in the business environment here. We are optimistic about compelling opportunities for a global investor like us in India. This is a good time to participate in Indian growth driven by the improving demographics, urbanization and policy reforms,” Amit Diwan, Senior Managing Director and Country Head, Hines India, told ET.

Hines India is looking to expand its presence in the country through new tie-ups and alliances.

The company is exploring new office projects through development management agreements in Bangalore, Pune and Mumbai property markets each. In addition to these, it is also expected to announce a housing project in Mumbai and Gurgaon soon.

Currently, the company has projects spread over a total 12 million sq ft under pipeline including under construction and design stage and the new fund is expected to increase its portfolio further.

“The company is open to various growth options including direct acquisitions, joint ventures, development management, forward funding and asset management,” Diwan said.

Hines forayed into the Indian property market in 2006 and initially developed and leased two office developments including One Horizon Center and Skyview Corporate Park in Gurgaon. The company, so far, has a $1.2 billion worth of portfolio with acquired, managed and under development assets.

At present, Hines has five office and three residential projects under various stages of development across the National Capital Region (NCR), Mumbai, Bangalore and Pune. In addition to its first office in Gurgaon, the company has also opened new offices in Mumbai, Bangalore and Pune, and is now looking to explore more property markets.

“We have announced a regional business structure at Hines India in January. This is aimed at sharpening our focus and accelerating growth across all regions. We are planning to enter Hyderabad this year,” Diwan added.

This year onwards, Hines India is looking to continue its developments stride with investment in prime locations for both office and residential projects and entering into development management agreements for setting up offices for occupiers in the information technology sector.

In 2022, the company will start vertical construction in Gurgaon and Pune property markets, and also start leasing in its 0.75-million-sq-ft office project Altitude in Bangalore.

Against the backdrop of an ongoing policy overhaul, rising investor confidence, enhanced transparency, and sustained growth in demand for grade A commercial office space, experts believe the investment momentum in the Indian real estate sector will continue to rise.

The appetite for Indian real estate assets among global institutional investors continues to be strong. Major foreign funds like Blackstone Group, Brookfield Asset Management, GIC, Xander, Ascendas, CPPIB, Warburg Pincus and Goldman Sachs are expanding their investments in the sector.

Source : ET

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