Under this platform, Godrej Fund Management will have the capacity to develop Class A office assets which will be valued at over $1.5 billion or Rs 11,000 crore upon completion. The total value of the office assets, including those of its previous funds, will bring the value of the portfolio when completed to over $3 billion or Rs 22,000 crore.
“We are thrilled to partner with APG on our second build-to-core platform. Our group has a strong belief in the premium office sector in India and we believe that the current market dislocation offers attractive capital deployment opportunities. The addition of this platform brings significant scale to our overall strategy and will open up strategic avenues for maximizing value going forward,” said Karan Bolaria, Managing Director and CEO of Godrej Fund Management.
Although the fund raised $250 million in the first close of this fund, it fully invested capital previously raised under GBTC I and Godrej Office Fund I. It is the third office-focused venture on India and fifth overall, sponsored by Godrej Fund Management. and currently holds assets worth over $2.25 billion.
“We look forward to another successful partnership with Godrej. The build-to-core strategy for the Indian offices aligns very well with our broader investment aspirations for our pension fund clients and our desire to invest alongside partners who offer the best execution in their class,” said Graeme Torre, Managing Director of APG Asset. Asia management.
Godrej Fund Management began investing in office projects around 2.5 years ago and counts among its partners global institutional investors like Allianz Real Estate in addition to Dutch pension fund manager APG Asset Managements. APG has partnered with GFM in four funds covering the residential and office segments.
Bolaria expects full fundraising to be completed later this year and will begin rolling out the fund immediately. The fund will continue to focus on the key geographies of Mumbai, Pune, Bangalore and the National Capital Region, as was the case with its previous fund. The entire fund is expected to be fully rolled out by mid to late 2022.
Each of these transactions will have an average equity size of $110 million and an enterprise valuation of $300 million, he said.
Godrej Fund Management and its subsidiary Godrej Investment Advisors, jointly representing Godrej Group, will provide 20% of the capital of this new office real estate development fund.
GBTC is a club-style office investment strategy that invests in the development of world-class office properties in prime locations across major office markets in India. The platform currently has a strong investment pipeline and aims to deploy the newly raised capital within 12 months. The fund will be keen to invest in greenfield office assets that can be developed into world-class Tier A projects.