Getty ImagesRealty firm Embassy Group and Ivanhoé Cambridge, a real estate subsidiary of CDPQ, has formed an investment platform focused on office business parks in campus-based and mixed-use environments in India with an investment capacity of $500 million.
Ivanhoé Cambridge and Embassy will be investing in an 80:20 ratio and will fund the acquisition and development of sustainable office led business parks in key urban centres of India. It first plans to roll out such development in the Southern Indian markets of Bengaluru & Chennai.
“This new venture with Embassy will allow us to reinforce our presence in India, a key country in our diversification strategy in Asia”, commented Karim Habra, Head of Europe & Asia-pacific at Ivanhoé Cambridge.
The platform will invest in develop-to-core and acquisition of partially developed business park opportunities to cater to the preferences of the millennial workforce in providing flexible workplaces and building sustainable communities across key Indian urban centres.
Chanakya Chakravarti, Managing Director, India, at Ivanhoé Cambridge, explained “The healthy build-to-core economics, quality tenant covenants, deepening secondary markets and overall market formalization make for an interesting opportunity. We look forward to collaborating with Embassy, an experienced developer with a formidable execution track record across market cycles, in expanding our portfolio and supporting the continued institutionalization of the Indian RE sector.”
The seed asset for the platform will be the first phase of the 60-acre Embassy East Business Park located in Whitefield Main Road in Bengaluru. The first phase will be developed on a land parcel of 9 acres, with a gross leasable area of 1.3 mn aft. The upcoming Business Park boasts of a mixed-use community offering co-living, essential retail and amenities which will create a vibrant ‘work-live-play’ experience for the occupiers.
Jitu Virwani, Chairman and Managing Director, Embassy Group, said, “This partnership of Embassy Group and Ivanhoé Cambridge is a strategic step towards transforming the commercial real estate landscape in India. Through the Embassy-Ivanhoe commercial office platform, we aspire to develop state-of-the-art business parks in India by integrating concepts like co-living and co-working, expansive office spaces, and easy to access amenities.”
Embassy Group already has an alliance with US private equity major Blackstone Group for buying ready and leased office properties in India. This alliance between Embassy and Blackstone will continue, while the proposed partnership with Ivanhoe will look for opportunities for new developments.
Global institutional investors, including Blackstone Group, Brookfield Asset Management, Singapore's sovereign fund GIC and Goldman Sachs have been investing in Indian realty assets for the past few years. In addition to this, more funds are eyeing investment and alliance opportunities.
Ivanhoé Cambridge also has a strategic co-investment platform with Piramal Enterprises to provide long-term equity capital to large residential developers across the five major metro cities in India— Mumbai, Bengaluru, NCR, Pune and Chennai. Ivanhoe Cambridge has already allocated an initial $250 million towards this fund.
The Canadian fund through its subsidiaries and partnerships holds interests in more than 1,000 buildings, primarily in the industrial and logistics, office, residential and retail sectors globally. Ivanhoé Cambridge held C$64 billion in real estate assets as of December 31, 2019.
Ivanhoé Cambridge and Embassy will be investing in an 80:20 ratio and will fund the acquisition and development of sustainable office led business parks in key urban centres of India. It first plans to roll out such development in the Southern Indian markets of Bengaluru & Chennai.
“This new venture with Embassy will allow us to reinforce our presence in India, a key country in our diversification strategy in Asia”, commented Karim Habra, Head of Europe & Asia-pacific at Ivanhoé Cambridge.
The platform will invest in develop-to-core and acquisition of partially developed business park opportunities to cater to the preferences of the millennial workforce in providing flexible workplaces and building sustainable communities across key Indian urban centres.
Chanakya Chakravarti, Managing Director, India, at Ivanhoé Cambridge, explained “The healthy build-to-core economics, quality tenant covenants, deepening secondary markets and overall market formalization make for an interesting opportunity. We look forward to collaborating with Embassy, an experienced developer with a formidable execution track record across market cycles, in expanding our portfolio and supporting the continued institutionalization of the Indian RE sector.”
The seed asset for the platform will be the first phase of the 60-acre Embassy East Business Park located in Whitefield Main Road in Bengaluru. The first phase will be developed on a land parcel of 9 acres, with a gross leasable area of 1.3 mn aft. The upcoming Business Park boasts of a mixed-use community offering co-living, essential retail and amenities which will create a vibrant ‘work-live-play’ experience for the occupiers.
Jitu Virwani, Chairman and Managing Director, Embassy Group, said, “This partnership of Embassy Group and Ivanhoé Cambridge is a strategic step towards transforming the commercial real estate landscape in India. Through the Embassy-Ivanhoe commercial office platform, we aspire to develop state-of-the-art business parks in India by integrating concepts like co-living and co-working, expansive office spaces, and easy to access amenities.”
Embassy Group already has an alliance with US private equity major Blackstone Group for buying ready and leased office properties in India. This alliance between Embassy and Blackstone will continue, while the proposed partnership with Ivanhoe will look for opportunities for new developments.
Global institutional investors, including Blackstone Group, Brookfield Asset Management, Singapore's sovereign fund GIC and Goldman Sachs have been investing in Indian realty assets for the past few years. In addition to this, more funds are eyeing investment and alliance opportunities.
Ivanhoé Cambridge also has a strategic co-investment platform with Piramal Enterprises to provide long-term equity capital to large residential developers across the five major metro cities in India— Mumbai, Bengaluru, NCR, Pune and Chennai. Ivanhoe Cambridge has already allocated an initial $250 million towards this fund.
The Canadian fund through its subsidiaries and partnerships holds interests in more than 1,000 buildings, primarily in the industrial and logistics, office, residential and retail sectors globally. Ivanhoé Cambridge held C$64 billion in real estate assets as of December 31, 2019.
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