Godrej Fund Management targets $3 billion office project portfolio by 2023

Godrej Fund Management, the real estate private equity arm of Godrej Group, plans to boost its portfolio of pan-India office projects to over $3 billion or Rs 22,000 crore by 2023 as it rolls out a strategy to make this portfolio public through a real estate investment. Trust (REIT) or hold these assets through a large private foundation fund. It will be India’s first domestic private equity fund with such a large portfolio of office projects that can compete with global entities such as Blackstone Group and Brookfield Asset Management seeking yield-generating commercial properties in the country.

“Yes, we are interested in creating a long-term holding structure for these assets. So it would either be a private core fund, where we raise more money and hold those long-term assets, of a perpetual nature, privately with the money we raise, or the very valid option of take that audience through a REIT structure,” Karan Bolaria, managing director and CEO of Godrej Fund Management, told ET.

The Godrej Group entity began investing in office projects around two and a half years ago and counts among its partners global institutional investors like Allianz Real Estate in addition to the Dutch pension fund manager APG Asset Managements. APG has partnered with the Indian private equity player in four funds spread across the residential and office segments. On Friday, the fund achieved the first close of its $500 million or Rs 3,700 crore office development platform, GBTC II in partnership with Dutch firm APG Asset Management NV, the lead investor in the platform. form.

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. Adding this platform brings significant scale to our overall strategy and will open up strategic pathways for value maximization going forward,” Bolaria said. 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. which currently holds assets worth more than $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.

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 deployed by mid to late 2022. Each of these deals will have an average equity size of $100 million and a business valuation of $300 million, a- he added.

Godrej Fund Management and its subsidiary Godrej Investment Advisors representing together Godrej Group will contribute 20% of the capital of this new office 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 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 turned into Class A projects.

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