Kotak Investment Advisors is planning to raise $1 billion (Rs 8,234 crore) to set up an investment fund dedicated for residential real estate in India, news agency Bloomberg reported.
Owned by Asia’s richest banker Uday Kotak, the fund may get $500 million (Rs 4,117 core) funding from Abu Dhabi Investment Authority. Allianze SE may deploy another $250 million into the fund, the report said, quoting anonymous sources, adding that Kotak is also in talk with other investors for funding. Since deliberations are still on, the deal size and many if its other aspects may be different from what is reported now, the Bloomberg report added.
Part of the Kotak Mahindra Group, Kotak Investment was founded in 2005, and has so far raised $6.3 billion in fundraising. In June this year, Kotak Investment set up a real estate-focused $5.30-million platform in association with ADIA. According to Bloomberg Billionaires Index,
While stating that the fund-raising exercise may be complicated by this year, Bloomberg said that Kotak may launch it in 2023. Focused on residential real estate in India’s five prime residential markets, the Kotak real estate fund would tap on the residential real estate segment in the world’s second most populous country.
It begs a mention here that India’s residential real estate has manifested a boom in the after- coronavirus era in which record low home loan interest rates and muted price growth prompted homebuyers to invest in property. As a result of this monetary driver, housing sales in the country’s prime residential markets have shown consistent improvement in the past one year. Data available with PropTiger.com show home sales in India’s 8 housing markets increased 49% during the July-September period of 2022 when compared to the corresponding period last year.
Recall here that Uday Kotak is the ninth richest man in India, with a net-worth exceeding $13.9 billion. According to the company website, Kotak Realty Fund has raised 11 funds and invested in 60 projects and companies across commercial office, residential, retail, industrial and hospitality sectors since 2005. Till date, Kotak Realty Fund has made investments over Rs 6,920 crore across more than 66 investments and has realized over Rs 7,300 crore from investments across residential, townships, commercial, hospitality projects.