Ascendas-Singbridge to float fund for commercial assets

Singapore-based office space solutions provider Ascendas-Singbridge Group is planning to raise a commercial real estate-focused fund with a target corpus of $300 million.

Mint reported earlier in the day that the capital will be raised mostly from third-party institutional investors, while the company will also contribute towards it. The fund seeks to make investments in projects where the land has already been acquired or have all the approvals in place.

“Ascendas-Singbridge, which has been fairly conservative in its approach, is focused on growing its fund management business as well as significantly expanding the office development portfolio, while retaining the high quality of assets and staying true to its India strategy.

While we are cautious about the office sector, demand for space is high and tenants are taking up additional space in our office parks, which is a healthy sign,” the Mint report quoted Sanjay Dutt, the chief executive of India operations at Ascendas-Singbridge India.

The firm currently manages $575 million across two funds focused on the Indian real estate market.

Email queries to Ascendas-Singbridge Group requesting comments on the development did not elicit any response till the filing of this report.

Recently, the group had partnered with local developer Firstspace Realty LLP to build logistics and industrial facilities across major warehousing and manufacturing hubs in India. In a sign of its growing interest in the segment, it plans to develop 15 million sq ft of space in key markets, including Mumbai, Delhi-NCR, Pune, Chennai, Bengaluru and Ahmedabad, over the next five to six years.

Ascendas-Singbridge has operational capabilities across the real estate value chain. It has been present in India for over two decades with Ascendas India. The group currently manages close to 10 million sq ft of assets in the country, valued at $1.9 billion, across Bengaluru, Chennai, Hyderabad, Pune and Gurgaon with seven IT parks catering to over 400 clients.

Of late, commercial real estate has been a bright spot in an otherwise gloomy Indian real estate market. According to real estate consultancy firm JLL India, the average vacancy rate has been declining since 2013 amid strong demand from domestic, as well as international office occupiers, and this trend is expected to continue in the medium- to long-term.

The country’s commercial real estate market has also been a sweetheart of global investors for a long time. Fund houses such as Blackstone, GIC and Brookfield have all taken exposure to the segment and have ramped up their activities.

In October 2016, Brookfield had closed a mega $1 billion in-principle transaction with Hiranandani Group for commercial assets.

Singapore’s GIC had also sealed one of the biggest deals in Indian real estate market by agreeing to buy the 40 per cent stake in DLF’s rental arm.

Some of the domestic private equity firms that are keen to bet on the segment includes ASK Property Investment Advisors, IREP Global and Kotak Realty Fund.

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