Brookfield invests in new asset classes

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Canada-based Brookfield Asset Management is looking to invest in new real estate asset classes in India, including rental housing and serviced apartments, and also to expand its office and hotel portfolio, a senior executive has said.

Brookfield has 47 million square feet of office space in six cities nationwide, and The Leela Hotels and Palaces which has 13 hotels. Overall, Brookfield Asset Management has more than $20 billion in assets under management in real estate, infrastructure, renewable energy and private equity in India.

“The rental economy is here to stay and rental space in the residential sector is exciting. People are much more mobile today. Co-living is part of that, but rental housing and serviced apartments, and anything that makes life easier for consumers, that’s where the company is going to go. We’re very excited to partner with carriers and explore that,” said Ankur Gupta, Managing Partner and Head of Real Estate, India and Middle East, Brookfield Asset Management in a fireside chat at the Mint India Investment Summit.

The global investment manager, which bought the Leela Hotels portfolio in 2019 to 3950 crore, plans to invest more and may partner with other brands as well.

“Over the past two years, we have invested heavily in the Leela business. From eight hotels, we now have 13 hotels. We have also invested significant capital in upgrading Leela’s existing assets. We continued to buy more hotel assets. We could consider expanding the Leela portfolio but also partnering with other brands. Good quality hotels run by a good management team will continue to thrive in a post-pandemic world,” Gupta added.

Brookfield manages approximately $690 billion in total assets worldwide, more than a third of which is in real estate. In India, its core business in real estate remains the commercial office. During the pandemic, the Brookfield India Real Estate Investment Trust (REIT) also listed.

“India is very important to Brookfield and is a prime investment destination. India is a high growth economy and Brookfield’s philosophy is to invest in income and cash generating assets. The macro trends in India are fantastic although the micro can still be a bit volatile,” he said.

Given the disruption caused by the pandemic and its impact on the office sector, Gupta said temporary closures were difficult.

“But I firmly believe that an office is an environment that creates organizations. Office space is here to stay. When the commercial office market reaches a certain level, a large portion of these assets will be housed in a REIT. A REIT is a way to house high-quality commercial assets and a way to facilitate investment in commercial properties,” he added.

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