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Indiareit to launch $500m India fund

  • Susannah Birkwood
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Indiareit Fund Advisors, a real estate investor backed by Indian entrepreneur Ajay Piramal, is planning to launch a $500 million offshore fund that will invest in domestic development projects.

The company's managing director and CEO, Ramesh Jogani, told Reuters that the vehicle will begin seeking contributions from US, European and Asia-based LPs after June.

"Investors are better educated about investing in India after their first round of learning, and developers have matured and are more investor-friendly, so there is minimum mismatch in investment expectations," commented Jogani.

The fund is intended to provide equity to projects in Mumbai, Delhi, Pune, Chennai and the National Capital Region, including Gurgaon. It succeeds Indiareit's three domestic funds, which have a combined value of INR19.5 billion ($396.38 million) and a $200 million offshore fund.

Indiareit is also fundraising for a $125 million rental yield fund which will support income-generating properties such as offices across India, and an INR5 billion slum redevelopment fund which will invest mainly in Mumbai-based projects.

Last September, Indiareit invested INR2 billion in a luxury residential project   developed by Omkar Realtors and Developers in Mumbai. The investment was made from the firm's INR9.3 billion Domestic Fund IV, formed in July 2010. At that time, half of the vehicle's capital had been invested.

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