Godrej realty PE arm to raise new fund focused on co-working, data centres

Godrej Fund Management has funds focused on residential property and on office and commercial property

Godrej Fund Management (GFM), real estate private equity arm of Godrej Group, is thinking of raising a fund in 2019, to invest in "sunrise" segments such as co-working spaces and data centres.

“We are looking to expand in new assets on the income generating side,” said Karan Bolaria, chief executive and managing director at Godrej Investment Advisors. He did not divulge the size of the corpus to be raised.

Property consultancy Knight Frank estimates that co-working operators accounted for 1.27 million sq ft of office leasing in the first half of 2018. This is close to a 200 per cent increase over the first half of 2017. GFM has funds focused on residential property and on office and commercial property. 

Bolaria said they were also considering floating a real estate investment trust (Reit) for commercial properties. “In the next 24 months, once we have a portfolio of three to five million sq ft, we will have a reasonable size to take it to a Reit,” he said.

Embassy Office Parks, a joint venture (JV) between the Embassy group and global PE investor Blackstone, has filed papers for the country’s first Reit. Godrej Group had said on Monday that GFM and Godrej Properties had formed a JV with Hero Cycles to build a one million sq ft commercial project on Gurgaon’s Golf Course Road. This would be the second investment for GFM’s Godrej Build to Core fund, meant for developing a property from scratch. It had earlier formed a JV with Godrej Properties, for developing a 1.2 mn sq ft one at Vikhroli in Mumbai.

GFM also has Godrej Office Fund, which invests in fully constructed properties. A year before, the latter had bought 250,000 sq ft of space from Godrej Properties in Mumbai’s BKC area. It had leased 75 per cent of the area over the past year, Bolaria said.

The same fund also bought G Corp Information Technology Park at Thane from PE investor New Vernon a year before. GFM has not disclosed the deal value.

Bolaria said GFM had invested 50 per cent between the two funds and would deploy the remaining Rs 45 bn in the next 18-24 months. And, that they had invested 70 per cent of the Godrej Residential Programme; they'd raise new funds on the platform next year.