GIC, Tishman to sell WaveRock in Hyderabad for Rs2,000 crore

Mumbai: Singapore’s sovereign wealth fund GIC Pte. Ltd and New York-based developer Tishman Speyer are set to sell their Hyderabad-based office property WaveRock for Rs2,000 crore, said two people aware of the development.

WaveRock is an equal joint venture between GIC and Tishman Speyer, spread over 2.5 million sq. ft in the Gachibowli financial district, a special economic zone (SEZ) promoted by the Telangana State Industrial Infrastructure Corp. (TSIIC).

Real estate consultant Jones Lang LaSalle Inc. has been hired to find a buyer and a number of global private equity investors have evinced interest, said one of the two people cited above on condition of anonymity.

Office space in WaveRock has been leased by global technology, industrial and services giants such as Apple Inc., Tata Consultancy Services Ltd, Accenture Plc, GGK Technologies, Aveva Solutions Ltd, CapGemini, BirlaSoft and DuPont India Pvt. Ltd.

In 2015, GIC picked up 50% stake in Tishman Speyer’s WaveRock and both expanded the property to 2.5 million sq. ft. Originally designed by one of the world’s leading architecture firms Pei Cobb Freed & Partners, WaveRock’s phases one and two—comprising 1.5 million sq. ft—were completed in 2010 and 2014, respectively.

Mails sent to spokespersons for GIC and Tishman Speyer did not elicit any response till press time.

“Office assets continue to attract global investors’ interest in a big way,” said Shashank Jain, partner and leader (real estate deals) at PwC India.

“The inherent demand for investible-grade core assets is still strong on the back of services sector-driven growth in the Indian economy. Expectations of decline in interest rates coupled with continued increase in lease rentals across micro markets provide a good opportunity for global investors to expect good appreciation of investments in this asset class,” Jain added.

With foreign investors stepping up investments in Indian real estate, private equity and debt investments in the sector touched a new high since 2008, at Rs42,800 crore ($6.6 billion), registering a 17% increase from the previous year, according to real estate consultant Cushman & Wakefield.

The year gone by saw a number of large investments by global majors such as Blackstone Group Lp, GIC, Canada’s Brookfield Asset Management Inc., Canada Pension Plan Investment Board (CPPIB) and Xander Group Inc. in Indian real estate.

In one of the largest transactions, GIC acquired 33.34% in DLF Cyber City Developers Ltd (DCCDL), the rental arm of DLF Ltd, for around $1.4 billion (Rs8,900 crore) in August last year.

“Investors who have invested in Indian office assets in the last 5-6 years are finding the time to be ripe to monetize the appreciation in investments driven by the aforementioned factors,” said Jain.

The jump in inflows during 2017 comes on the back of a three-fold rise in investment in the office segment, signalling heightened interest of institutional investors in pre-leased office assets, according to the Cushman & Wakefield report.

The office sector witnessed a massive jump in investments to Rs13,200 crore from Rs4,000 crore in 2016, led by stake sale in office portfolio of a leading developer. Stability in the commercial office sector with strong momentum in leasing, stable returns on investments, as well as the potential to list income-yielding assets under REITs have steered multiple investors towards office assets. The year 2018 is also likely to see continued momentum and strong inflows into commercial office assets, said the Cushman & Wakefield report.livemint