Global alternative investment advisor Varde Partners has invested over Rs 1,150 crore in Hyderabad-based Phoenix Group’s two under-construction information technology special economic zone (IT-SEZ) projects in Gachibowli locality of the southern city, said persons with direct knowledge of the development.
Both the projects, with a total 3 million sq ft development, are located in Gachibowli financial district and are situated within a half a kilometre radius. The projects—Phoenix Aquilla and Phoenix Centaurus—are 50% completed and 12-18 months away from completion.
Phoenix Centaurus is a tower spread over 2 million sq ft across 17 large office floors adjacent to Microsoft’s operational campus in the city, while Phoenix Aquilla will have a total 1 million sq ft development next to Amazon’s operational campus.
“The global investment flowing into these under development SEZ projects indicates the resilience and strong confidence shown by international investors in Indian office market,” said one of the persons mentioned above.
Prior to inducting Varde Partners, the Phoenix Group has entered into partnership with global entities such as CapitaLand, Xander and Lake Shore for its other projects.
The total development of 3 million sq ft in both these IT parks is pre-committed to tenants like ZF Technologies and Micron Technologies.
ET’s email query to Phoenix Group remained unanswered until the time of going to press. Varde Partners and transaction advisor CBRE South Asia declined to comment.
In February, Ascendas India Trust entered into an agreement with the Phoenix Group to acquire an IT SEZ project for Rs 506 crore. This project, aVance 6 at HITEC City in Hyderabad, is spread over 630,000 sq ft and around 98.3% of the space here is leased to Amazon Development Center.
Abu Dhabi Investment Authority (ADIA)-backed Lake Shore India Advisory had in 2019 bought a majority stake in a retail mall project in Hyderabad from Phoenix Group for around Rs 1,000 crore, inclusive of construction funding.
In 2018, Xander Investment Management, the private equity real estate arm of global investment firm The Xander Group, had signed a Rs 2,550 crore primary investment with the Hyderabad-based developer for development and acquisition of 4.5 million sq ft office space in the city.
Indian real estate sector is expected to continue to witness increased interest from global institutional investors and higher allocation of long-term capital from them given the limited growth opportunities in other developing markets.
Two major deals in 2020—the Blackstone Group taking over of 21 million sq ft of completed and under-construction office, retail and hospitality assets from Prestige Estates for around $1.2 billion and the Brookfield Group picking up RMZ Corp’s 12.5 million sq ft office and co-working assets for $2 billion—indicate the continued interest in India and office properties that account for a major share of the portfolio deals.
Institutional investment in the Indian real estate staged a smart recovery during the quarter ended December with $3.5 billion investments. As a result, the year 2020 closed with $5 billion investments, equivalent to 93% of 2019 transactions, despite a sudden halt brought on by the pandemic.
