Canada’s Brookfield Asset Management is looking to invest in new real estate asset classes in India including rental housing and serviced apartments, and also expand its office and hospitality portfolio, a top executive said.
Brookfield owns 47 million sq. ft of office space across six cities in the country, and The Leela Hotels and Palaces which has 13 hotels. Overall, Brookfield Asset Management has over $20 billion of assets under management across real estate, infrastructure, renewable and private equity in India.
“The rental economy is here to stay and the rental space in residential sector is exciting. Populations are a lot more mobile today. Co-living is one part of it but rental housing and serviced apartments, and whatever makes consumer lives easier, that is where the business is going to go. We are quite excited about partnering with operators and exploring this,” Ankur Gupta, managing partner and head of real estate, India and Middle-East, Brookfield Asset Management said in a fireside chat at the Mint India Investment Summit.
The global investment manager, which bought the Leela Hotels portfolio in 2019 for ₹3950 crore, plans to invest further and may also partner with other brands.
“In the last two years, we have been investing heavily in the Leela business. From eight hotels, we have 13 hotels now. We also invested significant capital in upgrading the existing Leela assets. We have continued to buy more hospitality assets. We could look at expanding the Leela portfolio but also partner with other brands. Good quality hotels run by a good management team will continue to flourish in a post-pandemic world,” Gupta added.
Brookfield manages about $690 billion of total assets globally, more than one-third of which is in real estate. In India, its core focus in real estate continues to be commercial office. During the pandemic, the Brookfield India real estate investment trust (REIT) was also listed.
“India is very important for Brookfield and is a top investment destination. India is a high-growth economy and Brookfield as a philosophy invests in income-producing, cash-generating assets. The macro trends in India are fantastic though the micro may always be a little volatile,” he said.
Given the disruption caused by the pandemic and its impact on the office sector, Gupta said the temporary lockdowns were challenging.
“But I firmly believe that an office is an environment that creates organizations. Office space is here to stay. As the commercial office market reaches a certain level, a large part of those assets will be housed in a REIT. A REIT is a way to house high quality commercial assets and a way to make investing in commercial properties easier,” he added.