JLL facilitates India’s largest commercial space transaction in 2019

by Priya Jadhav

Hyderabad, December 2019: JLL acted on behalf of the sellers, Tishman Speyer and GIC in the latest transaction of WaveRock office development in India. Shapoorji Pallonji and Allianz Real Estate Fund have acquired it for US$250 million.

Located in Hyderabad, the 2.3 million sqft office development is currently occupied by global technology and service giants like Apple, DBS, GAP, Du Pont, Accenture and TCS. It is a fully stabilized asset developed by Tishman Speyer.

Ramesh Nair, CEO & Country Head – India, JLL said, “Income-producing real estate opportunities in India are offering high growth and stable returns. This is primarily why global institutional investors and sovereign wealth funds are showing increasing interest in the sector. This marquee transaction indicates that the real estate market is favourable for newer and bigger investments.”

“In spite of the economic slowdown, we feel commercial real estate activity in India will continue to increase given the long term fundamentals of the country’s commercial market. Single asset transactions are expected to rise in 2020 considering the amount of global institutional capital looking at India, and with office absorption in the country being the highest in the world. Going forward, foreign capital will continue to play a larger role. We believe there will also be newer sources of capital coming from Europe, Canada and Japan, increasing the investment activity, which we believe will also lead to Cap Rate compression,” added Nair.

Priyank Shah, Director, Capital Markets, JLL Asia Pacific said, “This deal underpins the strong investor confidence in India’s office market, as we’re seeing our clients becoming more active in expanding their real estate portfolios. Hyderabad’s growing technology and e-commerce industry is creating demand for premium office spaces along the financial district, a highly-sought after sector that investors are keen to be a part of.”

“We are extremely pleased to have assisted the sales process to achieve a record pricing for the largest deal in 2019 creating a new value benchmark.”

Hyderabad continues to witness a healthy supply of offices. According to JLL’s Third Quarter update, among all prime markets in the country, Hyderabad topped the chart in net absorption and new completions, registering a 36% and 44% market share, respectively, on the two parameters during the July-September quarter.