Godrej PE arm raises $350 mn to invest in office assets

Godrej Fund Management has raised around USD 350 million in the first phase of two new funds it had set up to invest in development of office projects and acquire completed office buildings.

Godrej Fund Management made the first close of its USD 450 million office development fund and the first close of its USD 150 million office investment fund. Unlike housing sector, the commercial real estate, particularly office buildings, is performing fairly well and attracting huge interest from domestic and global investors.

The group is entering the commercial real estate private equity space, said Pirojsha Godrej, Chairman, Godrej Investment Advisers -- the holding company of Godrej Fund Management.

"We have completed the first closing of both the two new funds. We have raised around 60 per cent of the total size of the two funds," Godrej Investment Advisers MD & CEO Karan Bolaria told PTI.

He said the two funds would be fully closed in the next six months and the entire amount would be deployed over the next two years.

Bolaria said the USD 450 million fund will be for the development of office assets, while the USD 150 million fund will buy completed and leased office buildings. Jointly the funds can invest/develop office assets worth over USD 1 billion in value.

The USD 450 million fund 'Godrej Build to Core - I (GBTC-I)' will invest in developing Grade-A office buildings in leading locations across the key office markets of India. APG Asset Management is one of the investor in this fund. These projects would be developed by Godrej Group's realty arm Godrej Properties.

The other USD 150 million fund 'Godrej Office Fund- I (GOF-I)' will invest in core and core-plus office and commercial properties across India.

On deployment of funds, Bolaria said it has bought 50 per cent stake in Godrej Properties' commercial project 'Godrej Two', located at The Trees in Vikhroli, Mumbai.

He also highlighted that Godrej Fund Management's assets under management (AUM), which is also managing two existing residential investment funds worth USD 475 million, has crossed the USD 1 billion mark.

"We believe there is a lot of opportunity for our fund management company in both residential and commercial real estate in India...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," Godrej said.

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