World’s biggest real estate investors are further expanding in India, a sign that fast-growing cities and market reforms that benefit foreign investment are attracting attention. Canadian firm Brookfield Asset Management is set to buy a number of office properties from Bengaluru-based RMZ Corp. for $2 billion, the country’s largest-ever commercial real estate deal. U.S. giant Blackstone is reportedly lined up to buy office, retail and hotel properties from Prestige Group. The deals are in part a bet on long-term demographic and policy changes in India outlasting current global economic and geopolitical uncertainty.
Office properties in India aren’t new ground for Brookfield or Blackstone. Both have acquired office assets, especially in larger cities with big tech scenes. In 2019, Blackstone’s Embassy Office Parks became India’s first real estate investment trust, and the private equity group this year launched Mindspace Business Parks, another REIT. Brookfield has filed with regulators to launch a REIT as well. While a big-ticket deal, the group is among other foreign investors increasingly looking to India’s favorable economy and demographics. Gross domestic product growth has averaged 6 percent to 8 percent over the past decade, and the nation has a young population with a rapidly growing middle class. While the office market has been a focal point, logistics and warehouse spaces are also gaining traction. Part of this is due to the introduction of a national goods and services tax in 2017 that replaced a host of state taxes, which had made establishing national logistics networks difficult.