Allianz, SP Group fund buys Hyderabad business park for US$250m

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A fund co-owned by Allianz Real Estate and India conglomerate Shapoorji Pallonji (SP) Group has purchased the WaveRock business park in Hyderabad, India for US$250m.

The deal comprises four office towers offering 2.4m sq.ft. of total leasable area in the Gachibowli financial district, a high-growth IT hub and established employment corridor, Allianz announced in a statement.

Completed in 2017, the business park is fully let and home to Apple, TCS, Accenture, DBS, GAP IT and other tenants.

“This investment is in line with our vision of creating a sustainable commercial real estate portfolio across key metros in India,” said Rajesh Agarwal, CEO of Shapoorji Pallonji Investment Advisors.

The SPREF II fund acquired the asset by purchasing all of the securities in the park’s owner, TSI Business Parks (Hyderabad).

SPREF II is a Singapore-domiciled fund targeting office assets across Mumbai, Bangalore, Hyderabad, Pune, Chennai and National Capital Region.

The fund, which has USD$500 in equity commitments, is building a long-term, cash flow producing office portfolio through develop-to-core, forward purchases, and stabilised or stabilising asset deals.

“This is one of the marquee commercial developments in India and is a terrific addition to Allianz’s office portfolio in 24/7 global cities,” said Rushabh Desai, Asia Pacific CEO of Allianz Real Estate.

“Our first investment in SPREF II, SP Infocity Pune, is outperforming its business plan. Office investments in India continue to offer attractive risk-adjusted returns.”

The transaction takes place as office take-up increased 2% year-on-year and rents rose 3.1% across the top seven cities in India during H1 2019, according to Colliers.

The deal comes after Allianz Real Estate teamed up with Indian conglomerate Godrej Group and committed US$150m to Indian office developments in August.

Allianz made its first real estate investment in India in 2017, when it established its office investment platform with SP Group.

Allianz Real Estate is investing into the country’s logistics real estate market as well, having partnered with ESR to create a US$1bn logistics platform in India in November 2018.

Allianz Real Estate had €67.1bn in assets under management, as of June 2019.