Godrej Fund Management launches USD 500 mn office platform; raises USD 250 mn in 1st round

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January 18, 2021 2:22 PM

Private equity firm Godrej Fund Management (GFM) has raised USD 250 million in the first tranche for its new platform to develop prime office buildings across four major cities.

godrejThe first deal from this fund is expected to be finalised before March 31, he said, adding that GFM would mainly focus on four markets -- Delhi-NCR, Mumbai, Bengaluru and Pune.

Private equity firm Godrej Fund Management (GFM) has raised USD 250 million in the first tranche for its new platform to develop prime office buildings across four major cities. Singapore-based GFM, a real estate private equity arm of the Godrej Group, on Monday announced the first closure of its USD 500 million office development platform ‘GBTC II’ in partnership with Netherlands-based APG Asset Management NV (APG). “We have made first closure of USD 250 million. The fund will be deployed this calendar year,” GFM MD and CEO Karan Bolaria told PTI.

In the first round, APG has invested 80 per cent of the total amount.

The first deal from this fund is expected to be finalised before March 31, he said, adding that GFM would mainly focus on four markets — Delhi-NCR, Mumbai, Bengaluru and Pune. Bolaria said the second tranche of USD 250 million will be raised and deployed by middle of the next year, he added.

Despite fall in leasing activities last year due to the COVID-19 pandemic, he said Indian office market will bounce back and demand will return to its full potential.

Bolaria said there is dearth of Grade-A office buildings in India and this fund aims to fill this gap. Under this program, GFM will develop office assets that will be valued in excess of USD 1.5 billion (around Rs 11,000 crore) on completion.

The total value of office assets including those from previous funds will take the portfolio value on completion to over USD 3 billion (around Rs 22,000 crore). GFM has fully invested the previously raised capital under GBTC I (USD 450 million) and Godrej Office Fund I (USD 150 million). This is the third India-focused office venture and fifth overall, sponsored by GFM. The two residential funds totalling USD 475 million have also been deployed.

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

The addition of this platform brings significant scale to the overall strategy and will open up strategic avenues for value maximisation in the future, he said.

Graeme Torre, Managing Director, APG Asset Management Asia, said, ”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.” As the largest pension provider in the Netherlands APG looks after the pensions of 4.7 million participants. APG provides executive consultancy, asset management, pension administration, pension communication and employer services.

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