UNITED STATES - Pramerica Real Estate Investors has created an investment platform for investing in India.
This involves a joint venture with Beekman Helix India Partners LLC (BHI). Up to around $500m (€319.1m) will be invested over the coming years.
These two firms have invested together in India previously, involving 11 equity investments with a total value of $220m.
There are several factors that lead Pramerica to believe in India on a long-term basis. One is overall consistent growth. GDP in India for this year alone is projected to grow by 8%.
Another issue is that local developers have liquidity issues: they have limited access to traditional capital markets and this creates new investment opportunities for foreign investors.
The JV will be known as Pramerica BHI India. It will be headquartered in Gurgaon near New Delhi. Development will be the initial focus of the venture.
Victoria Sharpe is the chief executive officer of Pramerica Real Estate Investors Asia. She said, "Like all emerging economies in Asia today, building has not kept up with the fast pace of growth…making the necessity to develop more crucial."
However, India still has limits on foreign investors investing in existing properties.
From the start the JV will focus on residential developments and office parks. Shekar Narasimhan is the chief executive officer of BHI.
He said, "These are the property types that we believe offer the best risk-reward relationship today. Over time, we may find opportunities in hospitality and mixed-use projects that meet our criteria."
The long range plan is that any properties that are developed for the JV will be placed into commingled funds for institutional investors who will be based in the US, Europe and Asia.