India an important investment destination: Lighthouse Canton

Expects new investment models to emerge in the life sciences real estate sector

Hyderabad: Singapore-based investment firm Lighthouse Canton finds India by virtue of being among the biggest economies in Asia, as an important investment destination. The company’s core life sciences real estate assets are currently in Hyderabad.

About five years ago, Lighthouse Canton, which invests in public equities, venture capital, private credit, and real estate investments across the geographies in the Asia-Pacific (APAC) region, invested in MN Park portfolio in Hyderabad through a private equity fund and has been managing the portfolio since then. In addition to the investment, the company also manages an equity fund with some exposure to public equities in the life sciences space in India.

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“In the APAC region, there are other flourishing clusters as well such as Singapore, Sydney, Bengaluru to name a few. We are looking at opportunities across all clusters as we aspire to strengthen our leadership position in the region. Over the next five to seven years, we see significant demand to be able to grow our portfolio by over 5-6x,” Sanket Sinha, head, Asset Management, Lighthouse Canton, Singapore, told Telangana Today.

He added, “Every sector has its own nuances and the life sciences real estate sector is still evolving in India and as we progress, we expect new investment models to emerge. From a sector perspective, our key focus will remain on R&D labs and office spaces for life sciences companies.”

Increasingly, global life sciences companies are going asset-light as they realise that there is no merit in having capital tied up in real estate when there is a long-term leasing option available. “Their return on R&D investment is significantly better than return on real estate investment, so it is a question of efficient capital allocation. As far as the question of stable operations is concerned, long-term leases with built-in renewal clauses address that issue,” Sinha noted.

Advantage India

Indian pharmaceuticals sector stands at about $42 billion as of 2020 and is expected to grow at a CAGR of about 12 per cent to reach $130 billion by 2030. The sector remains extremely important for the Indian economy being amongst the top 10 foreign direct investment generators and a net positive trade balance sector.

While generics and vaccine manufacturing will continue to be large drivers of the growth, upcoming areas include biosimilars (India has the highest number of approved biosimilars globally, 93 as against 26 for USA and 61 for EU) and contract research organisations, where the growth is driven by the presence of a skilled talent pool, large diverse population and a strong regulatory framework, making India an ideal destination for clinical trials.

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