Canada's Brookfield makes a foray into development management business

Canada-based private equity (PE) fund manager Brookfield Asset Management has forayed into development management business in the country wherein it will manage development and construction of properties of landlords or developers for a fee. This is the first time any global PE fund manager has entered this business.

Brookfield is doing a 2-million square feet (sq. ft) infotech special economic zone (SEZ) project of Wadia Stud Farm in Yerawada area of Pune, said a source in the know.

“Though they are developers themselves, it is the first time they are doing development management for others. If it becomes successful, they would expand the business,” said the source.

Development managers normally charge 15 per cent of the project cost.

Brookfield has undertaken development work in infotech SEZs acquired from Unitech Corporate Parks in the National Capital Region and Kolkata.

 
Brookfield declined to comment, while Wadia Stud Farm could not be reached.

“It’s very interesting. There are developmental risks attached, but that’s the only way PEs will be able to grow as there is not much stock of completed offices left,” said Anuj Puri, chairman at ANAROCK Property Consultants.

Interestingly, Brookfield’s global rival Blackstone has mostly bought ready properties in the country such as Express Towers, 247 Park, One BKC and so on.

Brookfield is also acquiring a prime Mumbai property spread across 9.67 acres, which includes a 100-room hotel, for Rs 750 crore from Sanjay Narang-owned Mars Enterprises and Hospitality, reports said recently. Brookfield, which earlier did the country’s largest commercial property deal by acquiring the Powai commercial properties of Hiranandani family for Rs 6,700 crore, owns properties of over 25 million sq. ft.

Brookfield, which has assets of $385 billion under development, also has property development arm Brookfield Properties globally.