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Korean asset manager Mirae floats $500 mn India realty investment unit

06 September, 2017

South Korea’s Mirae Asset Global Investments Co. Ltd, which currently runs a mutual fund business in India, is planning to enter Indian real estate market to buy leased-out commercial assets across the top cities, according to a media report.

The company would pump in roughly $500 million in the realty market to mark its entry and has hired Ashwini Kumar Mathur to head its realty business, Mint reported.

Mathur has joined the firm from Cushman & Wakefield where we worked as assistant vice president – capital markets. He has also worked with companies such as Tata Realty and Infrastructure and Ascendas India Trust in his career spanning over a decade.

“Mirae Asset group is bullish on the country and the Indian real estate sector. The underlying dynamics for the sector are very robust. We are confident that the demand drivers for office space, warehousing and hospitality segments are intact,” the report quoted Jun Young Hong, head-businesses, Mirae Asset Global Investments (India) Pvt. Ltd as saying.

The firm is looking to buy commercial properties such as office parks, warehousing assets and hospitality projects in top cities including Mumbai, Bengaluru, National Capital Region (NCR), Pune, Chennai and Hyderabad.

“We are looking at creating a portfolio of income-generating assets. The assets we are looking (at) would be large and not smaller stand-alone or strata ownerships. We are targeting those cities and micro markets where economic base/IT services are well entrenched with the availability of core assets,” Hong told the business daily.

While Mirae’s assets are spread across fixed income, mutual funds, private equity and real estate in different countries, it manages mutual fund assets worth Rs 10,000 crore in India.

The development comes at a time when commercial real estate market has outdone the housing market in India. Rent yielding assets in the country are enjoying a smooth ride while residential properties are finding it tough to attract buyers. Given the momentum in the commercial segment on the back of strong leasing and falling level of vacancy, a lot of global and domestic investors have shown interest in taking an exposure.

According to a recent report by consultancy firm CBRE, 2016 was a landmark year for the sector, with record absorption levels of over 43 million sq ft, reflecting a 9% year-on-year growth. High absorption levels and global investor interest will continue to bring life into India’s office sector in 2017 too and absorption is likely to be in the range of 40 million sq ft, it noted.

Warehousing as an asset class has also gained prominence among investors and a few global investors have forged joint venture agreements to take exposure in the segment.

Buoyed by positive sentiments in real estate market, especially rent yielding assets, a number of Chinese and Japanese companies have also shown interest to get into Indian real estate market to tap into the opportunity.

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Korean asset manager Mirae floats $500 mn India realty investment unit

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