Betting big on Indian real estate

Brookfield India Real Estate Trust (BIRET) has expanded its portfolio. Recently it acquired a 50% stake in four Grade A commercial assets owned by Bharti Enterprises in the northern region of India. This acquisition solidifies the firm’s position as a leader in the immensely promising Real Estate Investment Trusts (REITs) space in the country.

The four acquired properties are: Worldmark Aerocity in New Delhi, a mixed-use development spanning 1.4 million sq. ft.; Airtel Center, a 700,000 sq. ft. corporate facility in north Gurugram; Worldmark Gurugram, a 750,000 square foot mixed-use property; and Pavilion Mall in Ludhiana, Punjab, covering 400,000 square feet. This transaction, valued at `6,000 crore, has enabled BIRET to incorporate an additional 3.3 million square feet of prime commercial space into its portfolio.

“We have successfully done one large acquisition every year. Our vision is to make BIRET one of the largest REITs in the country and in the region.”

— Rachit Kothari Senior Vice President of Investments, Real Estate at Brookfield Asset Management

From an initial portfolio of `11,000 crore, BIRET has grown to around `34,000 crore.

This move is consistent with Brookfield Properties’ global strategy of acquiring properties in prime locations and making them significantly better by using its operating capabilities. “Waterstones (hotel and club), our development next to the Mumbai airport, is a great example,” says Kothari.

The recent acquisition brings into focus the country’s growing real estate sector and the increasing prominence of REITs as an investment vehicle. Says Kothari, “India’s economy is one of the few in the world with both double-digit nominal GDP growth and room for declining interest rates. This creates substantial demand for real estate across various sectors. In the context of India, we’re talking about $3 trillion of GDP growing to $5 trillion of GDP. That’s a lot of growth and all that growth has to be housed in some form of real estate.”

Moreover, India’s transformation from a ‘back office of the world’ to a global hub for high-end work in sectors like pharmaceuticals, banking, and aerospace has driven significant demand for quality office spaces.

As REITs are financing and developing these high-quality office spaces demanded by global industries, the appeal of REITs as an investment vehicle is growing.

BIRET is well-positioned to capitalize on the evolving real estate market. With a strong foothold in the office, retail and hotel sectors within the country, the company is exploring diversifying into other areas.

Kothari is particularly optimistic about industrial warehousing and multifamily housing. “These sectors have shown remarkable resilience and profitability in various international markets,” he says. “By leveraging our extensive global experience and expertise, we aim to pioneer and expand these asset classes within the Indian market.”

As BIRET continues to grow, it aims to not only replicate Brookfield Properties’ global successes but also tailor its approach to meet the unique demands of the Indian economy.

Sustainability remains a core focus for Brookfield Properties, with the company committed to achieving Net Zero emissions across its global portfolio by 2040. In India, BIRET assets have received many prestigious sustainability certifications, including Indian Green Building Council (IGBC) Gold, IGBC Platinum, and a five-star rating from the Global Real Estate Sustainability Benchmark (GRESB).

These recognitions are a testament to the firm’s future-focused asset management.

Amid rapid urbanization, a thriving service sector, and strong regulatory backing, the outlook for REITs in India is promising. Thanks to Brookfield Properties’ global expertise in REITs, BIRET is well-equipped to spearhead this growth.