A brake in a real estate sector doesn’t seem to have any impact on US-based private equity firm GSC(Golden State Capital), who has decided to invest upto $1 billion in India, maximum by next 2 years through its real estate investment trust (REIT).
“Along with our investors, we are seeking for stabilized office assets that are FDI( Foreign Direct Investment) and we have an appetite approx to $ 1 billion in the next three years and if we get the chance at appropriate valuation,” told by GSC Chairman Sumit Nanda to business Standard in an interview.
The firm is looking at a REIT listing of more than $500 million and we are already evaluating some deals and we have even discovered our consultants, investors and partners and furthermore, looking at assets built and leased in the last 2-4 years and as well as stabilized assets with blue-chip tenants.
Moreover, he also added, that GSC was optimistic on the long term potential of these assets, as the cost of property construction in India has been climbing at a very high speed and that is due to inflation. And we see REIT as a better and fruitful stage to attain high quality office assets in the cities like Pune, Mumbai, Noida, Gurgaon, Chennai, Bangalore and Hyderabad.
Basically, REIT is a vehicle that invests in real estate to spawn income, which is later on passed on to investors.
And recently, GSC has launched ‘Burman GSC’ and it’s a joint venture with Burman family. And GSC started in 2000, and there focus was on two main markets that are US and India with the operational offices in these two countries and also Singapore and first it entered in Indian market in 2002, when it started construction of leased asset in India and in 2008, it entered into a joint a joint venture with Ascendas to develop a 62 acre IT SEZ in Gurgaon.
When it was asked by the Nanda, that why GSC was re-entering India when the realty sector was slow then he said “we believe in the economy’s long term potential but Yes there are challenges in short term phase, but we believe in the economy will see a great turn soon. And as per the Nanda, the country shows a lucrative opportunity for long term investors and no doubt real estate has been preferred sector as come to the others sectors.
And REIT was a great platform for offshore investors, particularly Singapore where such investment are considered secured. Furthermore, Security Exchanged Bored of India’s outline the guidelines for REIT which will be released by October.
