ASK Property Investment Advisors, the property fund arm of ASK Group, plans to launch $ 200 million (Rs 1,100 crore) international real estate fund next month.
The fund plans to do initial closure in March 2013 and final closure in 12 months after that, said Sunil Rohokale, CEO and managing director, ASK Investment Holdings.
In launching such such a fund, ASK joins half a dozen fund managers such as HDFC, IDFC, IL&FS, Indiareit, Kotak, Tata Realty & Infrastucture which are planning to launch overseas realty funds.
The fund is looking at gross returns of two times of funds invested and 20 per cent internal rate of returns.
ASK’s fund titled ‘ASK India Real Estate Special Opportunities Fund’ will be the first such fund to be based out of Singapore, said Amit Bhagat, chief executive and managing director, ASK Property Investment Advisors.
“We will invest in mid segment housing where assets are self liquidating,” he said.
The fund will have a life of six years, which can be extendable by two years. It is looking at investing in top five Indian cities, Bhagat said. Recently, ASK has announced the closure of its Rs 1,000 crore domestic fund.
“Oveaseas investors have learnt many aspects of Indian real estate after FDI was allowed in Indian real estate and they appreciate the right investment strategies,” said Rohokale.
According to property consultant JLL, after the FDI was allowed in real estate in 2005, India has seen investment of $14 billion in real estate and funds have seen an exit of $ 2 billion to $ 3 billion in the last four years.
According to Bhagat, though a total of 60 international funds were functional in India before the slowdown of 2008-09, the number has come down to 12. "Only those who had long term strategy are still investing," he said.
Meanwhile, ASK has invested Rs 100 crore from its recently raised fund in a residential project of Sushil Mantri group in Bangalore for an undisclosed stake.
The project has sales valuation of Rs 400 crore and has 200-300 apartments.
ASK manages Rs 1300 crore corpus in two of its real estate funds and recently made two investments from its second fund- first with Rajesh Builders and second with Godrej Properties in Mumbai.