Temasek-owned real estate asset manager Mapletree Investments, GIC of Singapore, Blackstone and Brookfield Asset Management are competing to acquire SP Infocity, a 2.7 mln sqft office park in Chennai, for an estimated Rs 2,500 cr. They all have placed separate bids to acquire the same.
Shapoorji Pallonji (SP) Group and Canadian Pension Plan Investment Board (CPPIB) equally own the office park in the southern metro’s IT corridor. CPPIB came in as an investor three years ago when SP Infocity was partially occupied. Currently, as the complex is completely occupied with A-grade tenants, the SP-CPPIB combine plans to sell the asset as part of its business model.
International property consultant JLL is running the auction process of SP Infocity — in which World Bank, Amazon, BNP Paribas, Freshworks and HSBC have their offices. The SP Group declined to comment on the report. Another person said Mapletree, which manages assets worth over $30 billion, was a strong contender for the asset. However, a third person said no bidder is in the pole position yet.
The SP-CPPIB joint venture model is to own, operate and later sell tenanted office buildings in the country. Besides CPPIB, SP Group has a similar partnership with global insurance giant Allianz.
CPPIB, also on its own, follows a similar course of owning office portfolios. India’s rental income generating office spaces have attracted a string of high-profile investors, as they seek stable yields in an economy riding heavily on the services industry.
Private equity firms Blackstone, Brookfield, and global pension and sovereign wealth funds — such as CPPIB and Qatar Investment Authority — have all acquired commercialreal estates, especially leased office spaces, in the world’s sixth-largest economy. Last week, it was reported that the SP-Allianz combine was in exclusive talks to acquire Waverock, a 2.3 mln sqft office park in Hyderabad, jointly owned by Tishman Speyer and GIC, for Rs 1,800 cr.
Technology companies lead the domestic office space absorption with almost one-third share in the first half of the current calendar year, benefiting from the strong US economic growth. Global investors are attracted by marquee tenants from the technology and financial services sector, though co-working and e-commerce startups have added buoyancy to the office-leasing activity in recent years.
India’s tenanted office absorption stood at 42mln sqft in 2017, while it crossed 20 mln sqft in the first half of the ongoing calendar year, a report from global consultancy firm CBRE said.