India: Kotak, DivyaSree float $400m fund to develop, acquire office assets

Photo: Reuters

Kotak Realty Fund has launched a $400 million fund which will partner with Bengaluru-based DivyaSree Developers to develop and acquire commercial office assets across India.

The $400 million India Office Assets Fund I is anchored by a subsidiary of UAE-based sovereign wealth fund Abu Dhabi Investment Authority (ADIA). DivyaSree is the exclusive development partner and property advisor for the fund and Kotak Investment Advisors Ltd (KIAL) will act as investment manager, the investment firm said on Tuesday.

It is structured as an alternative investment fund (AIF) under SEBI regulations.

The fund’s strategy is to develop greenfield projects as well as acquire under-construction and completed assets across key office markets like Bengaluru, Hyderabad, Pune and Mumbai.

This is a unique occasion when a limited partner (LP) like ADIA has stepped in to anchor an entire fund under an investor-developer partnership.

The Kotak-DivyaSree fund comes soon after the ₹4750 crore initial public offering (IPO) of Blackstone Group Lp-sponsored Embassy Office Parks real estate investment trust (REIT) opened on Monday, in a game changer for India’s real estate sector. This is India’s first real estate investment trust or REIT.

“We have a compelling opportunity to develop and operate quality commercial assets for marquee global customers. This is the first time in India where a financial institution and a developer have come together on a fund platform,” said Vikas Chimakurthy, CEO of Kotak Realty Fund.

India’s commercial office market is on an upswing and top developers, funded by global investors such as Blackstone Group LP and GIC Pte Ltd, are leaving no stone unturned to grow their portfolios this year, anticipating high demand and good momentum in leasing.

Bhaskar N. Raju, managing director, DivyaSree Developers said, “…With this fund, we will consolidate our position in the three cities and also expand footprints in new key markets of Mumbai, Pune and National Capital Region (NCR).”

DivyaSree currently has commercial projects across South Indian cities of Bengaluru, Hyderabad and Chennai, where DivyaSree is a major player.

S Sriniwasan, Managing Director & CEO, KIAL said: “As we scale the asset management business, we will work with likeminded partners and create appropriate platforms to address a variety of capital requirements in India.”

The growth in office space is despite a sustained slowdown in the residential sector where several realty companies are saddled with unsold apartments. This has led a number of developers to shift towards office projects, although the bulk of the office sector is still concentrated with a few top developers and investors.

Bengaluru led the overall office leasing in the country in 2018, according to India Office Market View report by CBRE South Asia Pvt. Ltd Tech companies dominated leasing activity, followed by engineering and manufacturing and telecom operators.

In March, ADIA also committed $500 million to a new distressed fund backed by Kotak Investment Advisors Ltd, the alternative investment arm of Kotak Mahindra Bank.

Also Read:

Kotak India Affordable Housing Fund picks 50% stake in Shriram’s project

UK private equity firm Actis seeks $500m for India real estate fund: report

This article was first published on livemint.com

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.