Prestigious Institutional Funds Establish Innovative Platforms for Premium Office Spaces in India

In the bustling tech hub of Bengaluru, a scarcity of high-caliber office assets for investment purposes is prompting institutional funds to collaborate with developers to construct top-notch office spaces right from the foundational stages.

Sankey Prasad, the chairman of renowned real estate services firm Colliers India mentioned that the market is experiencing a dearth of finished Grade A office assets ripe for investments, as the crème de la crème of office spaces have predominantly been secured by leading institutional investors.

He also emphasized that despite the economic uncertainties, global investors, recognizing the burgeoning opportunities, will persist in their pursuit of premium office assets in India, thereby fostering the establishment of more platforms dedicated to the development of superior Grade A office assets.

In another notable development, Ivanhoé Cambridge, a Canadian real estate titan, and Singapore’s Mapletree have synergized to invest in technology-driven office properties in India.

This follows previous collaborations where Axis Asset Management Company partnered with US-based Tishman Speyer, and L&T Realty allied with CapitaLand India Trust, to innovate platforms for office asset development.

These collaborations are not only paving the way for diverse exit strategies but also enhancing the liquidity of finished assets. Institutional funds are meticulously curating their portfolios to meet the growing demand for stabilized assets in the commercial real estate sector in India. They are strategically allocating funds in revenue-generating assets, forward purchases, and build-to-core properties, utilizing investment formats such as equity and structured equity.

CapitaLand Investment is in the process of orchestrating a business park development fund, named CapitaLand India Growth Fund 2, aiming for a fund size of $385 million (INR 3,195 crore). This fund is poised to invest in Grade A business parks situated in prime locales across major gateway cities in India, reflecting the escalating demand and strategic importance of office spaces in the region.