Godrej Fund Management, the Singapore-based real estate private equity arm of the Godrej Group, announced that it has reached the first close of its second closed-end office development at $250 million.
Netherlands-based APG Asset Management NV is the cornerstone investor in the $500-million fund that will develop Class-A office assets across India.
The Godrej Group, the Indian conglomerate headquartered in Mumbai, has put in $50 million into the fund called Godrej Build to Core (GBTC) II. The previously raised funds, GBTC I ($450 million) and Godrej Office Fund I ($150 million), have been fully invested.
The PE firm said the new vehicle will allow it to develop Class-A office assets that will be valued in excess of $1.5 billion on completion and will bring the total value of its office assets on completion to over $3 billion.
“Our group has strong conviction in India’s premium office sector and we believe the current dislocation in markets provides attractive capital deployment opportunities,” said Karan Bolaria, the firm’s managing director and CEO.
Godrej made its first investment in India in 2017 by establishing an office investment platform with Shapoorji Pallonji. In 2018, it backed a logistics development venture with ESR.
The firm has invested in six properties across Pune, Bengaluru, the National Capital Region, and Mumbai. The strategy for the new fund remains focussing on the four key markets and buying land and building office properties.
APG Asset Management, the cornerstone investor in the second fund, was also one of the three backers in the first fund, joining Allianz and Godrej Group.
APG, the largest pension provider in the Netherlands, looks after the pensions of 4.7 million members. It manages approximately 560 billion euros ($676 billion) in pension assets.
“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,” said Graeme Torre, managing director at APG Asset Management Asia.
The first close of GBTC II comes as the COVID-19 pandemic has delayed project completion, softened office rentals, and sapped demands. India’s commercial office market, however, continues to attract long-term investor interest.