Kotak Investment Advisors Ltd has launched a $400 million fund focused on commercial real estate in the country and has brought on board Bengaluru-based DivyaSree Developers (P) Ltd as the development partner, the alternative assets arm of Kotak Mahindra Group said in a statement.
Christened as India Office Assets Fund I, the $400 million entity is anchored by a wholly-owned subsidiary of the Abu Dhabi Investment Authority (ADIA).
DivyaSree is the development partner and property adviser for the fund while Kotak Investment Advisors will act as the investment manager.
The fund is structured as an alternative investment fund under regulations by the market regulator.
The platform would develop new projects as well as acquire under-construction and completed assets across key commercial office markets in India.
“We currently provide quality commercial spaces across South Indian cities of Bengaluru, Hyderabad and Chennai, where DivyaSree is a major player. With this fund, we will consolidate our position in the three cities and expand footprint in new key markets of Mumbai, Pune and National Capital Region (NCR),” said Bhaskar N Raju, managing director, DivyaSree.
Vikas Chimakurthy, chief operating officer, Kotak Realty Funds, a part of Kotak Investment Advisors, said, “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.”
S Sriniwasan, managing director and chief operating officer, Kotak Investment Advisors, said, “As we scale up the asset management business, we will work with like-minded partners and create appropriate platforms to address a variety of capital requirements in India.”
Kotak Investment Advisors focuses on the alternative assets business of the group. While the Kotak Mahindra Group had been associated with private equity investments since 1997, the alternative assets group was set up in early 2005 with its first structured third-party private equity and real estate funds.
Since then, Kotak Investment Advisors has raised in total $3.5 billion across different asset classes including private equity funds, real estate funds, infrastructure funds, special situations fund and listed strategies.
Established in 2005, Kotak Realty Funds, a part of Kotak Investment Advisors, has raised $1.51 billion in total capital commitments and invested in 49 projects, according to its website.
With presence across residential, commercial, retail and hospitality segments, the Kotak Group has so far financed 67 million square feet of residential projects and six million square feet of commercial space.
Earlier this year, Kotak Realty Funds exited its three-year-old investment in a township project of real estate firm Lodha Group.
As reported by VCCircle, Kotak Investment Advisors recently set up a fund with CDC, a development finance institution owned by the British government, for the development of affordable housing.
DivyaSree Developers has projects across Bengaluru, Hyderabad and Chennai, and is evaluating options to move to key markets of Mumbai, Pune and NCR. The developer has roughly 27 million square feet of projects at various stages of construction.
Commercial real estate as an asset class has become a favourite among global investors. German insurance firm Allianz has set up a platform with Shapoorji Pallonji Group to acquire and build commercial assets in the country.
Blackstone, which is getting its portfolio under Embassy Office Parks listed through REITs (real estate investment trusts), has been actively acquiring rent-yielding assets in the country. It is in advanced stages of discussion to acquire a marquee asset in Mumbai’s Bandra-Kurla Complex (BKC).