Godrej Fund Management plans to launch another office development fund

After raising $450 million (Rs 3,200 crore) for its office development fund, Godrej Fund Management, real estate private equity arm of Godrej Group, is looking to launch a newer one with a larger corpus, early next year.

“We plan to close the (proposed) fund by mid next year. It would be bigger than the first fund (Godrej BTC-1),” said Karan Bolaria, managing director and chief executive.

He said the Godrej BTC-1 fund could develop about five mn sq ft of property, as could the next fund. “We can develop about 10 mn sq ft with a total valuation of $2 billion and then explore a Reit (real estate investment trust),” he said. Bolaria added the company was also looking to set up a fund to invest in data centres and bring in an investor.

Godrej Fund Management raised $150 million from Allianz Real Estate, a unit of German insurer Allianz,  in the Godrej BTC-1, in the final round of fund raising.  This is the first office development fund raised by a fund manager in the past 18 months. Dutch pension fund manager APG Asset Management and Godrej Group had already committed $150 million in the fund.

Around 65 per cent of the corpus has been put in two developments, totalling two mn sq ft, in Mumbai and Gurgaon (Gurugram).

With the new fund raise, Godrej Fund Management now has $1.6 billion (Rs 11,400 crore) of assets under management. It also has funds for residential real estate.

Betting on rising rents and demand for office property, investors from abroad such as Blackstone and Brookfield have put billions of dollars in such assets. Blackstone itself has invested over $5 billion in commercial property, owning 100 mn sq ft with its partners. Brookfield owns about 25 mn sq ft.