Sept. 11 (Bloomberg) -- Indiareit Fund Advisors, the
venture capital firm controlled by the Piramal Group, plans to
raise as much as $750 million overseas for what could become
India's second-largest real estate fund.
The Mumbai-based company may begin tapping investors in the
U.S., Europe, Middle East and Japan by year-end, Managing
Director Ramesh Jogani said in an interview yesterday. The fund
will invest in companies building apartments, malls and offices
in India.
India, the fastest-growing major economy after China, may
receive as much as $10 billion in overseas funds betting on real
estate in the coming 2 1/2 years, Indiareit estimates. Housing
Development Finance Corp., Infrastructure Leasing & Finance Ltd.,
and Kotak Mahindra Bank are among institutions raising money to
invest in unlisted developers and projects.
``Demand for space in India seems unending,'' said Raja
Seetharaman, associate director at Jones Lang LaSalle Property
Consultants in Mumbai. ``Investors are looking for a big
opportunity in India as the economy is poised to grow a minimum
7.5 percent over the next few years.''
Real estate funds focused on India have attracted about $3
billion so far, according to Indiareit, on optimism economic
growth that averaged 8.6 percent over the past four years will
power demand for offices, shopping malls and residences.
India's real estate industry may swell to $90 billion by
2015 from $12 billion in 2005, Moody's Investors Service said in
June.
Residential Boom
``All the signs are there that the momentum will be
maintained,'' Jogani said.
Indiareit, which raised $200 million from individuals and
companies overseas last year and 4.3 billion rupees ($106
million) domestically, plans investments in projects in Mumbai,
Bangalore, Hyderabad, Chennai and Pune. ABN Amro Holding NV and
ICICI Bank Ltd. helped it raise the money.
London-based 3i Group Plc, Europe's biggest publicly traded
private equity firm, invested $40 million in the $200 million,
five-year fund Indiareit closed in September last year. That
fund may triple during its lifetime, Jogani said.
Indiareit has earmarked about two-thirds of the amount
raised for its real estate funds to residential projects,
seeking to profit from rising demand for homes as salaries rise,
Jogani said. India faces a shortage of 25 million houses,
according to HDFC.
New Funds
Housing Development Finance, India's second-biggest home
mortgage lender, last month raised $800 million from overseas
investors for a nine-year real estate fund, the nation's biggest,
exceeding the $630 million drawn by SUN Apollo Real Estate Fund
in January.
Kotak Real Estate Fund is raising $350 million from
overseas investors in addition to the $500 million it raised
locally to invest in houses, offices, hotels and warehouses,
Vikas Chimakoorti, a partner at the fund, said last week.
IL&FS Investment Managers Ltd. and U.S-based Milestone
Capital Advisors Pvt. yesterday said they plan to raise 10
billion rupees to invest in hotels, hospitals, warehouses,
offices and houses.
The Piramal Group controls companies including Nicholas
Piramal Ltd., the nation's seventh-biggest drugmaker by market
value. It set up Indiareit in early 2006, Jogani said.
To contact the reporters on this story:
Sumit Sharma in Mumbai at
sumitsharma@bloomberg.net .
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