Brookfield close to buying 2 NCR assets of Bharti Realty near Delhi airport and Gurgaon for about $1 billion

Canada’s Brookfield, one of the world’s largest alternative asset managers and investors with $600 billion of assets under management, is close to buying Bharti Realty’s upscale commercial properties near Delhi airport and Gurgaon for around $1 billion, said people aware of the matter.

“Brookfield is the clear frontrunner to buy Bharti Realty’s commercial real estate in the Worldmark towers in Delhi Aerocity and Gurgaon, and a deal is likely soon,” one of the people cited told ET.

“Only the current operational portfolio of Bharti Realty is part of the deal, while future property development of the company, which includes almost 10 million sq ft in Delhi’s Aerocity, will continue to be part of Bharti’s commercial property holdings,” said one of the persons cited.

Valuations Largely Unchanged
Bharti Realty is the real estate arm of the Sunil Mittal-led Bharti Enterprises. Its upmarket Aerocity properties, amongst the costliest commercial spaces in the National Capital Region (NCR), have seen some exits, but valuations have largely remained constant, experts said.

Brookfield did not respond to queries. Bharti Realty declined to comment.

Bharti may use a portion of the proceeds of a potential deal in its telecom business, especially as flagship Bharti Airtel faces Rs 43,980 crore in total adjusted gross revenue (AGR) dues, of which it has so far paid Rs 18,004 crore, said people with knowledge of the matter. The remainder needs to be paid through March 31, 2031. Bharti Airtel also has spectrum payments worth Rs 8,500 crore coming up in FY23.

A senior Bharti Realty executive said the company will continue with its property asset management model in the capacity of a consultant. It proposes to manage around 2 million sq ft of commercial space in NCR without owning it. The company is looking to implement its Real Estate Asset Management (REAM) model in two-three projects in the micro markets of Noida and Gurgaon.

Bharti Realty will operate a fee-based model with landowners, working with them on asset conceptualisation through to maintenance, without investing anything directly.

The company also has an investment pipeline of Rs 10,000 crore. It’s developing 10 million sq ft of grade A office space in the next phase of Aerocity’s expansion.

Current property rentals at Aerocity Phase II are in the Rs 210- to-250 per sq ft range. Leases will start at around those levels and could exceed Rs 300 per sq ft, potentially making it one of the most expensive commercial spaces in India.

Delhi International Airport Ltd (DIAL) has held auctions for office space around the airport in two phases of 5 million sq ft each. According to DIAL, for development of the first phase of 5 m sq ft, the developer pays a one-time sum of Rs 1,837 crore and annual lease rent of Rs 363.5 crore till 2036. Lease rental will escalate by 50% for the extended term of 30 years until 2066. Bharti Realty is awaiting master plan approval before engaging consultants for construction.