Lighthouse Canton to enhance portfolio in Genome Valley
Singapore investment firm expects absorption in life sciences real estate to increase to 5 lakh sq ft per year capacity over the next few years
Hyderabad: Global investment firm Lighthouse Canton is strengthening its life sciences real estate portfolio in Hyderabad, with a focus on providing leased laboratory space at Genome Valley, the largest life sciences research & development (R&D) cluster in India with over 200 global and large Indian companies. Recently, the company partnered with Ivanhoe Cambridge to invest together in life sciences real estate.
Hyderabad city is one of India’s major destinations for the life sciences sector contributing more than 50 per cent of all drug exports from India. It contributes almost 33 per cent of the global vaccine supply, with four out of the five largest Indian vaccine manufacturers based out of Genome Valley. The city has an established ecosystem with presence of industry, availability of a skilled talent pool, supportive government policies and initiatives to provide continuous boost to the sector.
Sanket Sinha, head, Asset Management, Lighthouse Canton, Singapore, told Telangana Today in an exclusive interview, “Given these factors, our investment in Genome Valley to support the R&D infrastructure requirements of life sciences companies is a high conviction theme for us. As it stands currently, we are the largest privately owned player by area in the leasable life sciences real estate space in South Asia. We believe that the demand for R&D spaces in India will see rapid growth in the next five to seven years.”
Expanding footprint
With the success of the Genome Valley cluster, companies globally and domestically are looking to expand their R&D footprint. “We have been seeing significant incoming demand for spaces which will help drive our investments and portfolio growth as well. Lighthouse Canton acquired MN Park in 2016 and we have a well-established asset management team in Hyderabad. In addition to the team in Hyderabad, Lighthouse Canton has presence in Bengaluru and Delhi as well,” he informed.
Lighthouse Canton already has an upcoming office and labs building of 2,00,000 sq ft in Genome Valley, which is expected to be ready for occupancy later this year and is currently being pre-leased. “We have a strong demand pipeline to cater to. Given the high occupancy rate within our portfolio and a strong demand for leased life sciences facilities, which we expect to increase to 5,00,000 sq ft per year over the next few years in India, we will be adding more space to our portfolio in Genome Valley as we expect the cluster to be a big beneficiary of this trend,” Sinha added.
Asset-light model
He noted, within Hyderabad and Genome Valley, there is an increasing demand for leasable R&D labs and office spaces from global and Indian companies. This demand includes built-to-suit developments for large corporates and real estate sale and leaseback opportunities.
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 added, “We are also evaluating opportunities in rapidly growing allied sectors with synergies with the life sciences sector, for e.g. medical devices is one such sector.”
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