Godrej Fund Management forays into office space, raises $600 million

Godrej Fund Management (GFM), the real estate private equity arm of the Godrej group, on Monday announced it had raised $600 million in the first phase of two new funds for investing in office projects.

The “Godrej Build to Core — I” (GBTC-I) fund, a club-style office investment platform, has raised $450 million. This will be invested to develop Grade-A buildings across key locations. APG Asset Management, which had invested in other funds managed by GFM, will be the cornerstone investor of GBTC-I.

The other new fund, “Godrej Office Fund — I” (GOF-1), a discretionary blind pool, has raised $150 million. “Blind pool” means the fund manager has discretion over where to invest. The fund will invest in core and core-plus offices and commercial properties across the country.

“We have raised around 60 per cent of the total size of the two funds,” said Godrej Investment Advisers Managing Director and Chief Executive Officer Karan Bolaria. Together, these can invest in or develop office assets worth $1 billion.

Now, GFM’s assets under management — it has two other residential investment funds — have crossed $1 billion, within a year of it being launched as a separate business, said a release from GFM.

GFM also entered into a deal with Godrej Properties, the real estate arm of the group, which gives the latter a 50 per cent stake in Godrej Two, the Grade-A commercial building coming up at The Tree, Vikhroli.

Pirojsha Godrej, chairman, Godrej Investment Advisers, said, “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.”

An analyst said, “Fund managers are betting on offices due to positive sentiment in the segment. The leasing is good and values are increasing.”

Godrej Properties is developing residential, commercial and township projects spread across 151 million square feet in 12 cities.