Mumbai: Nuvama Asset Management, and Cushman & Wakefield, a leading global commercial real estate services firm, on Wednesday announced a joint venture (JV) to create a platform to provide professional services to help domestic high-networth individuals invest in commercial real estate.
The unique 50:50 joint venture entity, Nuvama and Cushman & Wakefield Management Pvt Ltd (NCW) is planning to launch a first real estate fund that aims to raise ₹3000 crore to invest in prime commercial properties across India’s high-growth markets. Securities and Exchange Board of India (SEBI) is yet to give its approval for the fund.
The joint venture will establish a strategic platform that aims to empower investors with superior fund management expertise through Nuvama, while leveraging Cushman & Wakefield’s global expertise in the commercial real estate industry. The joint venture will initially focus on providing investment opportunities to domestic investors in the Indian commercial real estate market, a space traditionally dominated by global investors.
The Prime Offices fund aims to invest in Grade A+ offices across top three micro markets in six cities including, Mumbai, Bengaluru, NCR, Pune, Chennai, and Hyderabad that account for over 70% of the leasing activity within India. The fund will look at investments across new buildings (less than one year for completion), completed and leased assets.
Anshu Kapoor, president, head of Nuvama Asset Management, said some domestic investors had tried to invest in office buildings earlier, but they found the experience of managing commercial real estate assets a tough one. “Domestic investors have largely remained under-allocated in this segment or participated through fragmented ownership without access to operational capabilities required to manage these real assets. This partnership and our funds will place the combined strength and scale of both of our companies in the hands of investors in India,” he said.
He said Nuvama is uniquely positioned to assess the needs of India’s investors across Tier 1, 2 and 3 locations and to create suitable investment solutions, while Cushman & Wakefield is a global leader offering a full suite of services across the value chain of commercial real estate. “We have the capability to offer our full suite of services from day one of operations. We have already recruited a Chief Investment Officer,” he said.
Anshul Jain, managing director, India & Southeast Asia and head of Asia Pacific Tenant Representation said, “The Indian office sector has shown remarkable resilience, setting itself on a higher plane when compared with other global markets. In the last two years the net office absorption has nearly reached 2019 pre-Covid levels of about 40-41 million sq ft.”
He said India’s strong economic growth forecast over the next decade, the office sector is poised to mirror this growth on the back of large domestic working population, a surge in Global Capability Centres (GCC) and strong emphasis among occupiers on moving into Grade A+ office assets that are sustainable. He said the 3x growth is seen in GCCs demand rising from about 65.7 mn sq ft in 2012 to 202.6 mn sq ft in 2023. “300 new GCC companies are likely to be set up over next three years in India. In 2022, 65 new GCC were set up in India.”
Matthew Bouw, chief executive, Asia Pacific, Cushman & Wakefield who was present at the strategic announcement, said, “India continues to be a standout player in the office sector both regionally and globally. With average demand forecasted at 40 million sq feet per year through 2027, India’s forecasted net absorption is expected to account for 50% of total office demand in Asia Pacific. Bolstered by India’s established reputation as a capability and innovation centre for many global companies, as well the country’s growth trajectory, strong economy and vast talent pool, the sector continues to perform exceedingly well and offers a compelling opportunity for investors.”