Mirae to enter India realty business with $500 million investment

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Mumbai: South Korea’s Mirae Asset Global Investments Co. Ltd plans to enter India’s real estate sector with a $500 million investment for buying commercial leased properties, a top company official said.

Mirae, which operates a mutual fund business—established in 2007—in India, has formed a real estate unit headed by Ashwini Kumar Mathur. Mathur, formerly assistant vice-president (capital markets) at property advisory firm Cushman and Wakefield, has worked with Tata Realty and Infrastructure Ltd and Ascendas Property Fund Trustee Pvt. Ltd.

“Our investments are part of the global allocation for real estate. The amount available for deployment in India would be around $500 million,” Jun Young Hong, head-businesses, Mirae Asset Global Investments (India) Pvt. Ltd, said over phone. He declined to comment on the time period for investing this amount, saying it will be “purely opportunity based”.

Globally, the Mirae group’s assets under management (AUM) stands at $100.5 billion spread across various product portfolios including fixed income, mutual funds, private equity and real estate among others. In India, it is managing Rs10,000 crore of mutual fund assets. Present in 12 countries, the company owns and manages around $11.6 billion worth of real estate properties.

“Mirae Asset group is bullish on the country and the Indian real estate sector. We feel that 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,” Hong said, adding the company has already started evaluating properties in India.

He said the firm is looking to buy prime commercial assets including information technology (IT) parks, corporate offices, warehousing and “selected hospitality assets” in 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 standalone or strata ownerships. We are targeting those cities and micro markets where economic base/IT services are well entrenched with availability of core assets,” Hong said.

According to a July note by property advisory firm JLL India, 2017 is expected to set a new milestone as far as investment inflows into Indian real estate are concerned. In the first half of the year, the total investment stood at over Rs16,000 crore,the highest ever seen in any year’s first half, JLL said.

“Big bang policy reforms, economic and political stability, liberalization of the FDI policy and the resultant improvement in the investment community’s sentiment are some of the factors working in Indian real estate’s favour,” said Shobhit Agarwal, managing director (capital markets and international director) JLL India.

A slew of reforms introduced by the government including implementation of goods and services tax (GST), Real estate (regulation and development) Act (RERA), real estate investment trusts (REITs) and the Benami Property Act among others would lead to the sector evolving into a more mature, consolidated and highly transparent industry. This, in turn, is expected to attract further private equity from abroad, he said.

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