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Real estate-focused alternative asset management firm integrated asset management plans to raise over Rs 1,500 crore through a commercial real estate fund to invest in India’s top six property markets. Category II Alternative Investment Fund will invest in pre-leased and income-generating properties Mumbai, Pune, Hyderabad, Bangalore, Chennaiand Delhi-NCR.
fund will allow integrated asset management To build an investment portfolio of over ₹4,000 crore with leverage potential. It recently got approval from capital markets regulator SEBI for the fund and aims to raise funds by the end of this year.
The new commercial property fund will be led by Ashish Mundda, who was recently hired by the company. His experience of over 20 years includes a significant stint in the New York office of global investment major BlackRock as Director and Co-Founder of Private Debt (Infrastructure) Platform.
“Commercial real estate is a natural hedge against inflation through rental growth and asset appreciation. The fund will primarily focus on complete buildings giving control over tenant mix, rent control and professional property maintenance. are targeting six Indian cities, which include over 95.% of Grade A office stock, Mundda, head of commercial real estate (investments) at Integro Asset Management, told ET.
The proposed fund, India Grade A Office Fund, will make Integro Asset Management the only real estate-focused multi-fund institution in India that can build portfolios across residential and commercial property sectors.
The firm has already raised a residential real estate fund of Rs 1,000 crore by June 2022 and through the same is investing in housing projects across the country. Mumbai, Puneand other major cities.
It will be one of the few commercial alternative investment funds by any domestic institution.
The company has also recently received approval and license for its Portfolio Management Services (PMS). It will also be used to co-invest in projects as it plans to build a portfolio of Rs 500 crore for residential projects exclusively in the self-redevelopment space and early stage through purchase of inventory of apartments. It is also looking to acquire projects of Rs.
The new fund with a total tenure of seven years is expected to invest between Rs 300 crore and Rs 600 crore per asset and its gross yield is expected to be around 20% factoring in leverage. At the asset level, the fund is expected to achieve an internal rate of return (IRR) of 8%-8.5%.
Large global and domestic institutional investors including Blackstone Group, Brookfield Asset Management, Singapore’s sovereign fund GIC, Canada Pension Plan Investment Board (CPPIB), Kotak Investment Advisors, Abu Dhabi Investment Authority and Qatar Investment Authority are already aggressively investing in Indian real estate. Investing from properties.
Commercial real estate is a major segment that has been driving inflow of funds over the past few years as institutions are increasing their investment portfolios.
India’s real estate sector is set to attract investments worth Rs 38,480 crore or $5.15 billion in 2022 spread across 47 deals, JLL India data showed. This translates to a 19% increase in investment despite an uncertain environment, which is a testimony to the confidence in the country’s property sector. The average transaction size of $105 million in 2022 is also up 46% from a year ago.
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