Godrej Properties (GPL) has announced creation of a residential development platform with Rs. 770 Crore of equity commitments comprising of a group of global investors led by Dutch pension services provider APG, one of the largest pension fund managers and real estate investors in the world. The investor group also includes Sparinvest Property Fund II, a global real estate fund-of-funds managed by Sparinvest Property Investors.
This residential platform will focus primarily on development of mid-income residential projects in Mumbai, NCR, and Bangalore and may opportunistically invest in Pune and Chennai. The initial commitments will be in the ratio of 29:71 by GPL and the investor group respectively.
The parties will endeavour to grow the platform over a period of time as the right opportunities continue to emerge. GPL will be the exclusive development manager of the projects to be pursued by the platform for which it will receive a development management fee.
The platform will enable GPL to capture outright land purchase transactions in currently dislocated market conditions without deviating from its asset light model and is expected to generate substantial earnings over the next 7 years, which will contribute significantly to the company’s growth.
Pirojsha Godrej, Managing Director & CEO, Godrej Properties said, “We are excited about this association with a global investor group led by APG, which will enable GPL to source deals with large capital requirements in our focus markets of Mumbai, NCR and Bangalore. This is an important growth opportunity for GPL which will allow us to extend the number of projects in our portfolio while maintaining our capital efficient land sourcing strategy.”
Sachin Doshi, Senior Portfolio Manager for APG in Hong Kong said, “We are looking forward to this relationship with Godrej Properties to invest in the mid-income residential segment in India’s tier-1 cities. In our view, these cities will continue to be long term beneficiaries of India’s urbanisation trends and also represent the deepest pools of residential demand in the country. We particularly like Godrej Properties’ capital efficient strategy and the strong brand affinity it enjoys with its customers and stakeholders.” Macquarie Capital (India) Private Limited acted as the sole financial advisor for the transaction.
