Piramal Realty is looking at launching a commercial real estate fund

Piramal Realty, real estate arm of the Piramal group, is looking at launching a commercial real estate fund, said a source. “The idea is to buy greenfield (new) and brownfield (under construction) properties and complete these, and then sell to other PE (private equity) funds. The idea is at conception stage,” the source said.

The source added the fund was a brainchild of Anand Piramal, founder of Piramal Realty and executive director of the group.

A spokesperson for Piramal declined to elaborate on the plans. This would be a new foray for the group. Its fund management arm under Piramal Finance is lending to developers of commercial property through various modes such as construction finance, lease rental discounting and so on.

Many global investors such as Blackstone, Brookfield, GIC and CPPIB, among others, have put billions of dollars into commercial properties in this country. While Blackstone has 78 million sq ft with its partners, Brookfield has 25 million sq ft. The prospects for real estate investment trusts have also prompted them to invest in commercial property, analysts have said.

Founded in 2012, Piramal Realty has half a dozen residential projects in Mumbai and surrounding areas, and a commercial project Piramal Agastya in the Kurla area of Mumbai. It has a development portfolio of 15 mn sq ft.

Global PE firms Warburg Pincus and Goldman Sachs have invested about $434 mn in the company, at the entity level, making it the largest PE funding in Indian real estate since 2008.