MUMBAI: Religare Global Asset Management, part of Religare Enterprises, is working on a plan to build a portfolio of socially relevant assets including hospitals, schools, retail malls and cinema halls that can be listed under a Real Estate Investment Trust, said a top official of the asset management company. The financial services major is looking to raise around $150 million, or around Rs 1,000 crore, for these investments in the next one year starting June.
This fund raising is part of Religare Enterprises' broad plan to raise total $500 million in the next three-five years for real estate investments. The new platform will be under the alternative assets portfolio Religare Global Asset Management that already has a $500-million healthcare business trust similar to REIT listed in Singapore and sponsored by Fortis Healthcare.
"We are looking to build a real estate private equity platform focusing on the Indian market. To begin with, we will be launching two funds — one of these aimed at core platform of REIT and the other as opportunistic fund investment in real estate," Jasmit Chhabra, Managing Partner, Real Estate-Private Equity, Religare Global Asset Management, told ET.
Apart from $150 million fund for investment in income-producing assets, Religare Global Assets Management is also looking to raise $350 million for investing in mixed-use townships around Mumbai, Pune, Bengaluru and Chennai in the next three-five years through its opportunistic real estate fund. Religare Global Asset Management is a global multi-boutique asset management company out of India with more than $20 billion in assets under management (AUM). Chhabra has joined the company this month itself and is currently focusing on building this platform for the company.
"Under REIT, we want to focus on socially relevant assets like education, entertainment, logistics and warehousing that are relatively recession resistant and offer better, stable returns," he said while highlighting that the group already has experience in handling a REIT in Singapore.
Religare Global Asset Management is currently in the process of applying to capital market regulator Securities & Exchange Board of India for registration of its REIT platform. "We will keep ourselves ready for REIT launch by June-July, and depending on further clarity on issues like Dividend Distribution Tax and Minimum Alternate Tax, will move ahead with it," Chhabra said.
For its opportunistic real estate fund, Religare Global is targeting 20-22% annual internal rate of return, while aiming for 15-16% consolidated annual returns for REIT and coupon dividend of 11% for REIT unit holders. The group is currently looking at acquiring certain ready income-producing assets for this platform.
While the fund for REIT investments will be raised domestically from Indian retail investors including high networth individuals, the opportunistic real estate fund will be raised in offshore market. For the offshore fund, Religare will be targeting institutional investors like sovereign and pension funds with longer holding capacity.