MUMBAI: Mumbai-based financial services company Centrum Capital has teamed up with the former head of property fund Indiareit Ramesh Jogani to form a real estate private equity joint venture company, India Property Advisors (IPAL), which will soon launch its first offering — the Mumbai Residential Opportunity Fund.
The maiden offering, with a size of Rs 250 crore and a green-shoe option of Rs 100 crore, will seek to tap the opportunities arising from wide differences in pre-launch prices of new projects in Mumbai compared to the completed apartments. "The fund will invest in bulk residential apartments in select projects in the city at attractive price points and stages," said Jogani, without disclosing exact terms of the joint venture.
The move to launch a dedicated fund for the country's financial capital comes at a time when the city has been witnessing fresh demand for properties since the pro-reform government took charge at the centre. The economic crisis led to a decline in demand for real estate projects in Mumbai, even as the city had been among the prime markets in the country for creating wealth for apartment buyers.
"Mumbai is the most valuable property market in the country. In the residential apartment space, value of one apartment in Mumbai is equal to value of all blocks put together in most other cities," said Ambar Maheshwari, managing director at international property consultancy firm Jones Lang LaSalle. "Also, Mumbai is more liquid when compared to other metro markets."
Jogani, who brings an experience of managing real estate funds worth Rs 4,000 crore, is the managing director and CEO of IPAL while Shailesh Viswanathan, who was earlier part of strategic consulting group CB Richard Ellis, has come on board as the chief investment officer. Gulzar Malhotra has also joined from CB Richard Ellis as the chief operating officer. Karan Kadam, who was earlier with Indiabulls real estate fund, has been hired as principal (investments). The venture is also in tune with Centrum's plan to strengthen its fund management business. "The venture is in line with our plan to build strong capabilities in the fund management business across sectors.
This is our second foray after the $100-million progressive India Fund launched in joint venture with Commonwealth Finance Corporation," said Rajnish Bahl, group managing director of Centrum Group. IPAL joins a growing number of big business houses, private equity funds and financial services firms that are looking to make substantial investments in India's growing real estate market amid expectations of a surge in economic growth.