Godrej Properties floats new funds arm, raises Rs 1,900 cr

In the biggest fund-raising by a real estate fund manager this year, Godrej Fund Management (GFM), the newly created real estate fund management arm of Godrej Properties, raised $275 million (Rs 1,900 crore) from international investors to invest in the property developments of the company.

Dutch pension fund asset manager APG Asset Management, which had a $200-million joint venture with Godrej Properties for property investments, has come in as the lead investor for Godrej Residential Investment Program II (GRIP II), Godrej Properties said.

Godrej Properties will hold a 20 per cent stake in the platform.

GFM will advise GRIP II investors on investments into a residential development platform with Godrej Properties.

Karan Bolaria, a senior executive at Godrej Properties, has been appointed as the head of GFM.

“We are expecting 20 per cent returns and looking to deploy the money in two to three years. This platform will help us undertake big projects without over-leveraging. We can also look at substantial fee and performance incentive,” said Pirojsha Godrej, managing director and chief executive, Godrej Properties.

“The earlier platform with APG is fully invested and now they have come in as a lead investor,” said Godrej.

Despite dull realty markets, Indian fund managers have been successful in raising real estate funds in recent months. Recently, Kotak Realty Fund raised Rs 1,600 crore ($250 million) for equity investments in realty projects from institutional investors. Likewise, ASK Group raised Rs 1,400 crore for realty investments.

Sachin Doshi, managing director and head of private real estate investments (Asia-Pacific) at APG, said: “In spite of a general slowdown in the asset class in the country over the past three years, our partnership projects have sold well, which is a testament to our partner’s execution capability and brand strength. We look forward to deepening the collaboration between our groups and supporting Godrej Fund Management.”

Godrej Properties is currently developing projects across 115 million square feet in 12 cities. APG Asset Management manages pension assets of around Euro 400 billion as of end-January 2016.