Godrej Properties spinning off realty fund management biz
Adi Godrej | Photo Credit: Reuters

Public-listed developer Godrej Properties Ltd is selling its entire stake in its fund management arm Godrej Investment Advisers Pvt. Ltd, it said in a statement.

Godrej Investment Advisers was set up in March 2016 and currently manages two residential real estate-focused funds. Godrej Fund Management, a subsidiary of Godrej Investment Advisers, created a platform worth $275 million with Dutch pension fund APG last year, as a follow-up to the $200 million residential development platform Godrej Property had set up with the investor previously.

These funds are managed by Karan Bolaria, who works as head of Godrej Fund Management.

When contacted by VCCircle, a spokesperson for Godrej Properties said, “We have taken an enabling resolution from the board. The exact valuation will be determined through a valuation exercise. It makes more strategic sense for the two businesses to be separate entities though there will continue to be cooperation between the two businesses.”

The development comes almost a year after the company created a separate entity for its fund management business. While the prime function of the funds was to back the projects of Godrej Properties, the platform was not closed for other developers, Bolaria had said at the time of the entity’s launch.

“Our partner for all residential schemes will be our own development arm but we might collaborate with other developers if we have a different mandate. We will have different schemes, may be through a managed account structure, for commercial and retail segments,” he had said.

He had also said the group was looking at fund management as a new source of revenue stream.

Godrej Properties has managed to clock healthy sales across some of its projects at a time when the housing market has been in tatters. In a recent statement, the company said it has sold 1,000 apartments across three new projects – Godrej Origins at The Trees in Mumbai, The Suites at Godrej Golf Links in Greater Noida and Godrej 24 in Pune – since March 2017.

In the financial year 2016-17, it clocked a net income of Rs 1,733 crore, up 24% compared with last financial year. Its profit increased 30% to Rs 207 crore during the period.

Godrej Properties is currently developing residential, commercial and township projects spread across approximately 133 million square feet in 12 cities.

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