Ivanhoé Cambridge has made its biggest investment in India to date through a partnership with Singaporean real estate company Mapletree, PERE has learned.
The two have formed a 50:50 strategic partnership to launch a new investment platform to develop, acquire and operate knowledge-based-sector-focused workplaces in India with an investment capacity of more than C$2.5 billion ($1.46 billion; €1.74 billion). Ivanhoé Cambridge will participate in investment decisions while Mapletree will be responsible for most of the on-the-ground execution of the strategy.
George Agethen, co-head of Asia-Pacific at Ivanhoé Cambridge, told PERE that this is the investor’s biggest investment in the country to date. The real estate subsidiary of Canadian pension plan Caisse de dépôt et placement du Québec has been looking to invest more “materially” in this particular subsector of office in India as the country has attracted a boom of “knowledge outsourcing” because of its skilled workforce, according to Agethen.
He pointed out that the size of the investment signifies the growing importance of India in the firm’s global allocation. “I would say just generally we see more and more of our peers over the last two years interested in India,” he observed.
When Ivanhoé Cambridge first began investing in China, “everything was needed. We needed residential, we needed offices and we needed retail. I think India is in that cycle,” he said. The investor opened an office in the country in 2018 after determining that India would become an important part of the real estate investment landscape.
This is the first partnership between Ivanhoé Cambridge and Mapletree, as well as the latter’s first time partnering with institutional capital in India.
Quek Kwang Meng, regional chief executive officer, India, Mapletree, told PERE that the firm had previously been investing on its own in the India real estate market for more than 10 years.
Mapletree first established its commercial footprint in the India market in 2011 with IT park and Grade A IT office developments in Bangalore and Chennai, respectively. It is also developing over six hectares of land into office park developments totaling more than 420,000 square meters. On the logistics front, Mapletree acquired a site in Bengaluru, on which the firm is slated to build 107,942 square meters of warehouse space by 2024.
“India is not an easy market. We actually do everything end to end from buying land to development and leasing and managing. A lot of the investors put their focus somewhere else. We found a niche and a lot of value was being created,” he explained.
Agethen believed both groups shared similar investment views. “We just found that with Mapletree there was so much alignment on the way we think, the way we think about risk, the way we think about execution, and our own corporate values, including sustainability,” he said.
The portfolio will be developed to meet industry benchmarks on sustainability, aligning with Ivanhoé Cambridge and Mapletree’s commitments to achieve net zero operational carbon by 2040 and 2050, respectively, according to a statement. It is also targeting other building accreditations such as WELL certification.