Brookfield closes in on $583m India purchase

The Toronto-based asset manager has agreed to acquire six IT parks in India from domestic developer Unitech.

Brookfield Asset Management is continuing to build up its real estate presence in India with a INR35 billion (€427 million; $583 million) portfolio purchase from listed developer Unitech.

Brookfield is acquiring Unitech’s holding company for six of its IT park development projects  in New Delhi and Calcutta for £206 million (€257 million; $350 million), which will total approximately 22 million square feet of lettable area once completed. As of March, the six parks were only 40 percent complete on average and 34 percent leased, but they are scheduled to be completed by the beginning of next year, according to a Unitech regulatory filing.

The acquisition would give Brookfield a 60 percent stake in the six IT parks. The remaining 40 percent currently is held by Unitech, but that stake is being sold to an unnamed “independent third party.” Brookfield has been named by Indian media as that third party, which would give the Toronto-based asset manager complete ownership of all six parks. Local media have estimated the entire purchase price to be somewhere around INR35 billion.

The deal still is subject to Unitech’s shareholder approval, which is expected to be secured by the end of this month. “As part of this transaction, certain affiliates of Unitech will continue to manage and develop these assets to ensure that there is no impact on tenants and other stakeholders,” Unitech added in a statement.

The capital for Brookfield’s investment is to come from the firm’s first global opportunistic property fund, the $4.4 billion Brookfield Strategic Real Estate Partners (BSREP) that it closed last year. As of May, BSREP already was 60 percent invested. Brookfield declined to comment further than its public statements.

Brookfield has been making sizable forays into Asian markets over the past year. In November, the firm committed $1.25 billion to China with a $750 million investment in a subsidiary of developer Shui On Land and plans to raise $500 million to be invested elsewhere. In India specifically, the firm closed a $200 million real estate joint venture fund with developer Peninsula Land for residential and commercial projects in November. Brookfield’s primary market in the Asia-Pacific region, however, remains Australia.