Bengaluru: Godrej Fund Management (GFM), the real estate private equity arm of Godrej Group, plans to invest and build commercial office assets through a $450 million office development fund as well as a $150 million office investment fund, marking the firm’s entry into India’s booming office real estate sector.
On Monday, the company said it has raised the first tranche of its $450 million office development fund as well as the first tranche of its office investment fund. Jointly the funds can invest or develop office assets worth over $1 billion in value.
With this development, the assets under management for GFM, which also manages two existing residential investment funds, has crossed the $1 billion mark within one year of it being spun out as a separate business.
Godrej Build to Core – I (GBTC-I), a $450 million office investment platform will invest in developing Grade-A office buildings in leading locations across key office markets in India. APG Asset Management N.V. , which has invested in previous funds managed by GFM, will be the cornerstone investor for GBTC-I.
The other newly raised fund is Godrej Office Fund- I (GOF-I), a $150 million discretionary blind pool fund that will invest in core and core-plus office and commercial properties across India.
“We are pleased to enter the commercial real estate private equity space. We believe there is a lot of opportunity for our fund management company in both residential and commercial real estate in India and we are happy to see the business quickly reach the $1 billion AUM (assets under management) milestone. We look forward to building a strong track record of excellence to ensure we remain a preferred partner to institutional capital looking to participate in the growth of the Indian real estate sector,” said Pirojsha Godrej, chairman, Godrej Investment Advisers Ltd, a fund management business that Godrej Properties Ltd had set up last year.
“We are pleased with our diversification into the office asset space through successful first closes of both our office funds. We are also delighted to continue our relationship with APG who have been a strong supporter of our funds management business since inception. The blend of investment management capabilities and strategic access to best-in-class development capabilities provides GFM with a competitive advantage and positions it well to deliver targeted risk-adjusted returns,” said Karan Bolaria, managing director and chief executive officer, Godrej Investment Advisers.
Godrej Properties has also diluted 50% stake in the entity developing Godrej Two, an under-construction commercial building located at its flagship project, The Trees project, in Mumbai’s Vikhroli through a deal with Godrej Fund Management.
The mixed-use precinct spread across 9.4 acres houses Godrej One, the Godrej Group’s global headquarters, and will comprise a luxury Taj hotel, cultural buildings, luxury residences and a high-street retail park. The Godrej Two will offer around 1.2 million sq.ft of built space and will be delivered within three years.