Allianz-Shapoorji looks to exit Hyderabad's IT SEZ Waverock for Rs 2,000 cr

In the single largest potential commercial property exit this year, a joint venture between the Allianz Group and Shapoorji Pallonji Group entity is looking to exit nearly 2.5 million sq ft IT Special Economic Zone (SEZ) property Waverock in Hyderabad for around Rs 2,000 crore, multiple sources aware of the deal said.

The property, which counts companies such as Apple, Accenture and Tata Consultancy Services as tenants, has attracted interest from several institutional investors.

“There are other funds also that had bid for the project but GIC has emerged as the front runner," said one of the persons mentioned above.

In 2019, Allianz-Shapoorji’s joint platform acquired the property from erstwhile joint owners Singapore’s sovereign wealth fund GIC and New York-based developer Tishman Speyer. GIC had acquired 50% stake in Tishman Speyer’s WaveRock in 2015 at an enterprise valuation of Rs 1,000 crore.

“The interest shown to acquire the asset indicates the confidence global institutional investors have in the Indian commercial real estate growth story. Income-producing commercial assets have proved to be a major draw for most of the global institutional investors that are active in India or are keen to invest here," said Sankey Prasad, chairman Colliers.

The IT SEZ developed by Tishman Speyer in two phases can accommodate 20,000 professionals, and is adjacent to Hyderabad's financial district at Gachibowli.

ET’s email queries to GIC and Shapoorji Pallonji Group remained unanswered until the publication of this report. Allianz declined to comment.

Allianz Group, in its first-ever real estate related engagement in India, had partnered with Shapoorji Pallonji Group to create an investment platform for acquiring office properties in late 2017. The platform, SPREF II, is a Singapore-domiciled, rupee-denominated, and closed-ended fund with a total corpus of $500 million in equity.

Asia-Pacific Exposure

The platform was part of Allianz’s strategy to allocate around 5% of its global real estate portfolio to the Asia-Pacific region. Allianz Real Estate, the real estate investment and asset manager within the group, had entered this platform on behalf of several Allianz companies.

Shapoorji Pallonji (SP) Group is looking to raise about $2.5 billion by selling some of its infrastructure and real estate assets to pare debt. It is also considering selling part of its interests in real estate assets with a development size of over 100 million sq ft.

Large global institutional investors, including Brookfield Asset Management, Singapore’s sovereign fund GIC, Canada Pension Plan Investment Board (CPPIB), Goldman Sachs, Abu Dhabi Investment Authority and Qatar Investment Authority have already been investing aggressively in Indian real estate assets.

Commercial real estate is a key segment driving these investments over the past few years. Institutions are ramping up their investment portfolios in the backdrop of opening an avenue for monetization through Real Estate Investment Trusts (REITs).

The Indian real estate sector attracted over Rs 38,480 crores or $5.15 billion of investments spread across 47 deals in 2022, showed data from JLL India. This translates into a 19% increase in investments despite an uncertain environment, a testimonial to the confidence in the country’s property sector. The average transaction size in 2022 at $105 million was also 46% higher than a year ago.