Godrej Properties Ltd (GPL), an Indian real estate developer, announced Monday the creation of a fund management subsidiary, Godrej Fund Management (GFM). The fund has raised $275 million from a group of investors led by Dutch pension fund asset manager APG Asset Management N.V. (APG) as a sequel to $200 million raised in 2012.
GFM will advise Godrej Residential Investment Program II (GRIP II) on investments into Godrej Properties' residential projects, the company said in a statement. Godrej Properties will hold a 20 percent stake in GRIP II.
"The new GRIP II platform in partnership with APG will help us attract high quality long-term equity investors to partner with us in our developments across India. This fits well with our strategy of deepening our presence across the country's leading real estate markets while maintaining a capital light development strategy," Pirojsha Godrej, managing director and CEO, Godrej Properties, said in the statement.
The Dutch pension fund manager said the partnership has been a good business proposition in India's real estate sector which is "complex."
"Our strategy of partnering with only the best local operators has allowed us to succeed in a complex market like residential development in India. In spite of a general slowdown in the asset class in the country over the last 3 years, our partnership projects have sold well, which is a testament to our partner's execution capability and brand strength," Sachin Doshi, managing director and head of Private Real Estate Investments, Asia Pacific at APG, said.
Godrej Properties is currently developing residential, commercial and township projects spread across 12 cities spanning about 115 million square feet.
Stocks of Godrej Properties were trading at Rs 288.50 at about 1.20 p.m. on Monday on the BSE, up 2.30 percent from its previous close.
The real estate sector in India has witnessed a slew of positive developments, starting with the removal of the dividend distribution tax (DDT) on real estate investment trusts (REITs) announced in the budget, followed by the passage of the Real Estate Regulator Bill.