Indiareit to Raise $500-Million Offshore Fund

Indiareit Fund Advisors Pvt Ltd, a real estate fund manager promoted by the $1.8-billion Piramal Enterprises, is preparing to raise a $500-million offshore fund. Indiareit is wooing London-based private equity and venture capital firm 3i, which manages 11.7 billion euros worth of assets globally, into its new offshore fund, sources close to the development said.

Talking to FE, Ramesh T Jogani, chief executive officer and managing director, Indiareit, said the new fund is expected be launched in 2011. Given its size, he said, “we are looking for large institutions globally.” “There are definite chances of 3i taking part in Indiareit’s new offshore fund,” he said, declining to elaborate. “Our firm is working on it.” He said 3i is already a cornerstone investor in a $200 million offshore fund that was raised by Indiareit in October 2006. It was Indiareit’s first offshore real estate fund. 3i has invested around $40 million in the fund. Indiareit’s 3i associated 2006 offshore fund has been invested in five real estate projects in India. That includes two projects promoted by Amsri Group in Hyderabad, two by Neptune in Mumbai and one from Paranjape in Pune.

The real estate market, that has been in the midst of a slump September 2008 on, started picking up from the last quarter, Jogani said. “If things are fine, we will come out with the new offshore fund in 2011,” he added. It would be Indiareit’s fifth real estate and the second offshore fund. The company has a corpus of Rs 1,850 crore raised through three real estate funds, two domestic and one offshore. It has used around Rs 1,400 crore by partnering with eight real estate developers for projects covering 47 million sq feet in five cities including Mumbai, Hyderabad, Bangalore, Chennai and Pune. Indiariet’s real estate partners include Neptune, Aristo and Samira in Mumbai, Amsri Developers in Hyderabad, Paranjape in Pune, Skyline in Bangalore and Chennai. Besides, Indiareit’s has invested in SSPDL’s three projects in Hyderabad, Chennai and Bangalore.

Indiariet has launched its fourth real estate fund–its third domestic fund–of Rs 500 crore. The scheme, that was opened in the first week of November with a ticket size of Rs 50 lakh, will have its initial closure by end-January, Jogani said. This fund will have a greenshoe option of Rs 250 crore. Currently Mumbai accounts for 47% in the Indiareit’s fund portfolio, followed by Hyderabad with 22% and Pune 18%. Bangalore and Chennai accounts for 11% and 2%, respectively.

News Published Under:   Real Estate India |

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