Indiareit Apartment Fund oversubscribed

The domestic apartment fund raised by the real estate investment arm of Mumbai-based Piramal Enterprises has been oversubscribed by INR1.5 billion within three months of launch.

Mumbai-based real estate fund manager, Piramal Fund Management, has raised INR5 billion ($81.41 million; €65.01 million) for its domestic apartment fund, surpassing its initial fundraising target of INR3.5 billion within three months of launch. A hard cap of INR7 billion has now been set for the fund.

Launched in July, the Indiareit Apartment Fund will be used to acquire apartment units from real estate developers in the country at discounted prices. The firm said that INR1.25 billion of the fund already has been committed across three transactions, of which the first – an INR 500 million investment in an under-construction residential project in Mumbai – has already been completed. The remaining transactions in Mumbai and Chennai are in the final stages of completion, the firm said in a statement.

“We are once again humbled to see such an overwhelming response to the fundraising exercise carried out by our platform,” said Khushru Jijina, the firm’s managing director. “With the Apartment Fund, we have consciously added another product to our suite of offerings to further our engagement with our development partners. This strategy uniquely enables them to advance construction and delivery of units without the pressure of sales and increases visibility of site progress.”

The Indian conglomerate Piramal Enterprises’ fund management business, which was formerly called Indiareit Fund Advisors, in January closed its fifth domestic fund, raising INR 10 billion predominantly from high net-worth individuals. That fund was invested in residential projects in Tier 1 cities. 

A few months later in June, Indiareit Fund Advisors was merged with Piramal’s non-bank loan business to form Piramal Funds Management. The new platform offers different financing options to developers, right from private equity to mezzanine and senior secured debt.

The firm also operates a $500 million residential debt platform together with Canada Pension Plan Investment Board (CPPIB). Launched in February, the venture marked CPPIB’s second real estate investment in India. It followed a $200 million investment by CPPIB with Mumbai conglomerate Sharpoorji Pallonji Group made last November for an office development program.