Venture Capital

Godrej arm raises $250 mn for office fund


Godrej Fund Management (GFM), the real estate-focused private equity arm of Godrej Group, marked the first close of its $500-million office development platform, GBTC II, at $250 million.

It raised $200 million from existing investor, Netherlands-based APG Asset Management N.V., and $50 million from the Godrej Group.

It will raise the remaining amount over the next 12-15 months.

GBTC has a ‘club-style’ office investment strategy that involves buying land and developing office buildings in key cities. The platform has a strong investment pipeline and aims to deploy the fresh capital within 12 months.

This is the third India-focused office venture and fifth overall, sponsored by GFM.

GMF had previously raised the $450-million Build to Core office development fund and a $150-million office investment fund, which are fully deployed.

“The build-to-core strategy for Indian offices aligns very well with our broader investment aspirations for our pension fund clients and our desire to invest alongside partners who offer best-in-class execution capabilities,” said Graeme Torre, managing director, APG Asset Management Asia.

“Our group has strong conviction in India’s premium office sector and we believe the current dislocation in markets provides attractive capital deployment opportunities,” Karan Bolaria, managing director and chief executive, GFM.

Mint had reported last September that GFM aims to raise a $500-million fund by early 2021 to invest in office properties, and was in talks with global investors.

Godrej’s move comes at a time when India’s commercial office market suffered a blip because of the covid-19 pandemic, but continues to attract long-term investor interest.

GFM will develop office properties that will be valued in excess of $1.5 billion on completion and the total value of office properties, including those from previous funds, will take the portfolio value on completion to more than $3 billion.

The average project size will be around one million sq ft each with an investment of around $100 million equity, Bolaria said.

It is looking at projects in Mumbai, Pune, Bengaluru, and the national capital region.

“There is a lot of interest from global institutional investors to invest in the fund. Our development pipeline will be ready in 24 months and we are creating future-ready offices and expect high demand for good quality properties,” Bolaria said.

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