Brookfield Asset Management, one of the world’s largest institutional investors, plans to invest more than $10 billion in India over the next three to five years to capitalise on a burgeoning real estate industry. This will double Brookfield’s real estate assets under management (AUM) in the country during the period, Ankur Gupta, managing partner and head of real estate for Asia Pacific at Brookfield told ET.
“Our commitment to India is unwavering; we remain steadfast in seeking out opportunities for growth…Looking ahead, the prospect of reaching another $10 billion seems far more attainable given our wealth of experience across various sectors. We will double from here in the next 3-5 years,” Gupta said in an interview.
Brookfield–one of the largest office owners and operators in India—currently has a portfolio spanning more than 51 million sq ft across seven key Indian cities. The firm currently has total AUM of more than $25 billion across infrastructure, renewable power and transition, real estate, and private equity sectors in India.
“While explosive growth isn’t predictable, we envision steady expansion over time in every country where we operate. India holds a prominent position in our portfolio with businesses becoming increasingly visible and vibrant,” Gupta said.
With a vast portfolio, Brookfield’s strategy for future growth in India is focused on continued diversification and expansion.
“We have plans to expand into housing, industrial and retail sectors, and there is ample room for growth in these areas. Real estate in India is under-built for what a $5 trillion economy would need,” Gupta said, indicating future investment prospects.
Housing is a key theme for Brookfield globally including Asia. The firm is currently executing a serviced apartment project in Mumbai‘s Andheri suburb and would actively consider building housing projects along with commercial and retail spaces in locations having substantial commercial spaces.
Gupta emphasized that this approach not only helps in transforming urban places into vibrant communities but also aligns with Brookfield’s conviction that rental housing is essential for enhancing affordability.
“Operating our assets effectively is ingrained in our DNA. Whether it entails development initiatives or collaborative ventures, we are equipped to navigate different scenarios. When partnership opportunities arise, we actively engage with a diverse range of corporates,” he said, referring to staying open to alliances for future growth.
Brookfield’s major investments in the hospitality sector, particularly The Leela hotel portfolio, mark a major milestone in its India story. Brookfield’s Leela transaction is by far the largest foreign investment in hospitality in India comprising 13 owned and managed hotels with 3,500 keys.
“What we do as our core business isn’t easy. It requires raising and deploying large amounts of capital and also a “roll up our sleeves” approach to execute our business plans. Take for instance, The Leela Palaces — it’s a turnaround story of a company in financial distress, operational challenges and several other areas that needed to be fixed,” Gupta said.
Elaborating on The Leela’s turnaround, he said Brookfield had to create a differentiated business plan given the sectoral uncertainty especially during the pandemic that struck in its first year of the company’s ownership.
Gupta said current positive industry tailwinds offer exciting growth prospects for The Leela and the company has a robust pipeline of growth through acquisitions, reflagging and development.
He believes that despite complexities, real estate remains the bedrock of economic progress and with India experiencing robust double-digit growth, demand for assets to fuel this expansion will intensify further.
Commenting on exits, Gupta said, “We have recycled capital from private investments. And India market has been one of the top markets for Brookfield globally in terms of investments as well as performance. To sustain this momentum, we consistently evaluate opportunities to either recycle assets into our REIT or to acquire new assets, thereby expanding our portfolio.”
“We keep looking at opportunities to recycle capital where it’s the most prudent way to go,” he added.
The portfolio of Brookfield’s listed Real Estate Investment Trust (REIT) consists of 25.4 million sq ft of total leasable area –20.7 million sq ft operating area, 0.7 million sq ft under construction area and 3.9 million sq ft of future development potential.
Apart from commercial offices, Brookfield sees growth opportunities across hospitality, housing, industrial warehousing and coworking segments in India.
“It’s essential to acknowledge the power of consistency and focus on what we do best, rather than being swayed by distractions. India offers a conducive environment for such focused growth, allowing us to leverage our past successes and build upon them,” Gupta added.
Gupta said when calibrated suitably, India is a top-notch market for Brookfield, standing out for its potential for robust returns.
“Our track record in India has been exceptional, a part of that is not surprising given the overall higher cost of capital in India relative to other markets like the US; but importantly the higher growth in India and our focus on operating excellence has allowed us to capture the positive macro environment into our business,” Gupta said.
