IndiaREIT targets $300m for opportunity fund

The Mumbai-based fund manager has closed on $150 million for its latest property fund, in which 3i is a key investor. The fund will invest in Tier 1 cities in India.

IndiaREIT Fund Advisors is targeting $300 million for its latest property fund, IndiaREIT Offshore Fund II.

The Mumbai-based fund manager held a first close on $150 million in September last year, according to a statement from Savills Capital Advisors, which is acting as placement agent. 3i Investments is a cornerstone investor.

The fund is expected to close in the first half of 2009, although Savills said in reports that the vehicle had the right to raise an extra $200 million if there was enough demand.

IndiaREIT, led by Ramesh Jogani, will target real estate opportunities in Tier 1 cities in India, where there is growing demand for residential and commercial property.

Vaibhav Rekhi, director of Savills Capital Advisors, said the Indian real estate market offered high returns but warned it was a difficult market to penetrate, not least owing to a “host of ‘me too’ sponsors”.

IndiaREIT’s previous offshore fund was launched in 2006 and targeted $200 million, according to the firm’s website. The fund invested in a 1.4 million square feet commercial complex in Kurla, Mumbai, that is being designed by UK architect Foster and Partners, as well as a mixed-use project in Hyperbad and an integrated township in Pune.