Indiabulls Asset Management, on February 15, 2017, said that it is planning a third real estate fund and its maiden one in the commercial segment and aims to raise Rs 1,500 crores.
In the past two years, the company has already raised Rs 1,500 crores and deployed Rs 1,000 crores under its residential strategy, the company said in a statement. The Indiabulls Alternative Investment Fund (AIF), will have a five-year tenure with an option of extending it annually for two years.
“Indiabulls Dual Advantage Commercial Asset Fund, will seek investment opportunities in the top commercial markets in the country, including the Mumbai Metropolitan Region, Delhi-National Capital Region, Bengaluru, Pune, Chennai, Hyderabad and Kolkata,” the release said. Investment targets would include Grade A office or commercial mixed-use assets, which are completed, pre-leased or have lease commitments while nearing completion, which would primarily help address risks related to approvals, construction and leasing.
See also: Delhi court issues notice to Indiabulls Real Estate on cheating plea
The fund will target a pre-tax IRRs of 16%-17% on a portfolio asset level, by investing in Grade A commercial assets by leading developers with excellent tenant quality and long lease tenure. “We believe that it is a good time to enter the commercial real estate market, given that most office markets are in the rental growth phase and the next 3-5 years will see robust rental and capital value appreciation. This fund is a logical extension of our successful residential investment strategy,” the company’s group executive head and CEO, Akshay Gupta said.
Commenting on the development, its CEO, private equity, Ambar Maheshwari said: “Our commercial investment strategy intends to provide downside protection through recourse to completed assets, returns through existing rental yields and capital appreciation on exit.” He further said that the fund will target higher returns, by implementing various strategies like the opportunity to bring rentals to market parity, repositioning assets to achieve higher rentals and innovative leverage and tax structures to plug leakages.
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