ASK Property Investment Advisors, the property fund arm of ASK Group, plans to launch a $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 12 months after that, said Sunil Rohokale, CEO and managing director, ASK Investment Holdings.
In launching such a fund, ASK joins half a dozen managers such as HDFC, IDFC, IL&FS, Indiareit, Kotak and Tata Realty & Infrastucture, which are planning to launch foreign realty funds.
The fund is looking at gross returns of two times of funds invested and a 20 per cent internal rate of return.
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, extendable by two years. It is looking at investing in the top five Indian cities. Recently, ASK announced the closure of its Rs 1,000-crore domestic fund.
“Foreign investors have learnt many aspects of Indian real estate after foreign direct investment (FDI) was allowed in Indian real estate and they appreciate the right investment strategies,” said Rohokale.
According to consultant JLL, after 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 a 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 the Sushil Mantri group in Bangalore for an undisclosed stake. The project has sales valuation of Rs 400 crore and 200-300 apartments.
ASK manages a Rs 1,300-crore corpus in two of its real estate funds and recently made two investments from its second fund — the first with Rajesh Builders and the second with Godrej Properties in Mumbai.