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Top institutional funds form platforms for office spaces

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Limited availability of quality office assets for investments is leading institutional funds to create platforms with developers for building office spaces from early stages, but they remain cautious amid a global recession and lower demand for large office spaces in the country.

“There is a shortage of completed Grade A office assets available for investments as most of the good quality office assets have already been funded by key institutional investors,” said Sankey Prasad, chairman of real estate services firm Colliers India. “Led by increased opportunity, global investors will be cautious but will continue to scout for good quality office assets, creating more platforms for developing high-quality Grade A office assets,” he said.

Recently, Canadian real estate company Ivanhoe Cambridge and Singapore’s Mapletree formed a platform to invest in tech-led office properties in India. Earlier, Axis Asset Management Company tied up with US firm Tishman Speyer and L&T Realty joined hands with CapitaLand India Trust to set up similar platforms to develop office assets.

Top Institutional Funds Form Platforms for Office Spaces

With multiple avenues for the exit of such portfolios and increasing liquidity of completed assets, the funds intend to curate their portfolio to cater to an increasing appetite for stabilised assets, industry insiders said. The funds are also looking at deploying money in income-producing assets, forward purchases, and build-to-core properties through formats including equity and structured equity.

CapitaLand Investment plans to raise a business park development fund, CapitaLand India Growth Fund 2, with a target fund size of $385 million (₹3,195 crore), to invest in Grade A business parks in prime locations across gateway cities in India.

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