Kotak Realty Fund completes India’s largest exit by a RE Fund
Mumbai,
March 7, 2011
The first property fund in India to return the entire corpus of the fund back to its investors
Kotak India Real Estate Fund I today announced the sale of Peepul Tree Properties Private Limited (Peepul Tree Properties), a wholly-owned undertaking, to Tata Realty Initiatives Fund 1 for an enterprise value of Rs 5,250 million (US$ 117 million).
Peepul Tree Properties owns an IT Park in the Mumbai suburb of Goregaon, which has been 96% leased to marquee tenants such as Accenture, HP, BNP, Tata AIG, BOB Legal and General, Integron and Prana Studios.
On an initial equity investment of Rs. 950 million, Kotak India Real Estate Fund I has received over Rs 4,000 million from the exit including internal accruals.
The exit has many firsts to its credit. In addition to being the largest real estate exit in the Indian market by a Fund, Peepul Tree Properties is the first office property to be divested by a property fund in India, and one of the first foreign direct investments in an income producing asset.
Kotak India Real Estate Fund I is the inaugural Rs 457 crore domestic fund (US$100 million) of Kotak Realty Fund. With this sale, Kotak Realty Fund will also become the first property fund in India to return the entire corpus of the fund back to its investors. The said Fund has other notable investments such as Lemon Tree Hotels, Pride Hotels, 3C Green Boulevard and Clover Golf community that remain to be exited.
Commenting on the sale, V. Hari Krishna, Director, Kotak Realty Fund said,”This has been a highly successful investment for the Fund, notably it was a control investment, which we have been able to lease, operate and exit profitably. A US$117 million exit of an office property in India demonstrates that the market is getting deeper and signals the return of institutional capital.”
S. Sriniwasan, CEO, Kotak Realty Fund said, “Our investment in Peepul Tree Properties and subsequent exit is a classic example of our approach to real estate investing and fund management. By making these investment decisions, we have helped build quality assets in partnership with leading Indian developers and have created enduring value for our investors.
“We are actively pursuing exit opportunities in our first fund, even while we continue to deploy capital from our subsequent funds. We have so far contracted exits aggregating US$ 177 million, underlining our credentials as one of India’s leading property fund managers. We will continue to focus on scaling up the business further with new fund offerings.”
About Kotak Realty Fund Group
Kotak Realty Fund, a division of Kotak Investment Advisors Ltd, was established in 2005. It is one of India’s first realty funds with an opportunistic Investment strategy. The core investment team includes Mr. S Sriniwasan and Mr. Hari Krishna, the founding members, and Mr. Vikas Chimakurthy.
Kotak Realty Fund has aggregate funds under management/ advisory of US$ 700 million across three funds:
- Kotak India Real Estate Fund I – A Rs. 4,570 million (US$ 100 mn) domestic fund
- Kotak Alternate Opportunities India Fund: A Rs. 14,917 million (US$ 331 mn) domestic fund
- Kotak India Realty Fund: An offshore fund of US$ 265 million
Kotak Investment Advisors Ltd (KIAL), a subsidiary of Kotak Mahindra Bank Limited, primarily focuses on managing the Alternate Assets business of the Kotak Group. The Alternate Assets business of the Group has grown to commitments of US$ 1.2 billion assets under management across two asset classes namely – Private Equity and Realty Funds, both led by independent Investment teams.
For more details on Kotak Realty Fund, please visit http://realtyfund.kotak.com/
For further information, please contact:
Phiroza Choksi
Kotak Realty Fund Group
Email: phiroza.choksi@kotak.com
Mobile: +91 98203 63681
Kunal Dutt
Genesis Burson Marsteller
Email: kunal.dutt@bm.com
Mobile: +91 9820536572
