PropShare floats Rs 700 crore fund to buy office spaces – Times of India
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MUMBAI: PropShare Capital, a tech-enabled investment manager, is raising Rs 700 crore through Propshare Real Estate Fund I — an alternate investment fund (AIF).
The fund will focus on completed income-generating commercial real estate leased to multinational and bluechip tenants in Indian tech hubs with 7-9% annual rental yields and with a projected 17-20% internal rate of return over a 4–5-year holding period.
Speaking to TOI, Kunal Moktan, co-founder & CEO, PropShare Capital, said the fund has the lowest charges with a 0.5-0.7% annual management fee and 10-15% performance fee depending on the quantum of investment.
“We are evaluating a few large grade-A properties in Bengaluru and Hyderabad. While opportunistic investments are still available, the discounts that were available 6-9 months ago have significantly reduced. As optimism returns to the market and large multinationals revive leasing plans, a small window of opportunity continues to exist to invest in high quality assets,” said Moktan.
The fund is targeted at institutional investors, HNIs, family offices, and select sophisticated domestic and NRI investors. The minimum investment of Rs 1 crore is in line with AIF regulations.
PropShare Capital’s current investor base includes institutional investors, family offices, HNIs and ultra HNIs and senior and middle management of large tech, financial services and consultancy companies as well as founders of startups.
According to Moktan, there has been no rent loss in its properties let out to multinationals. “Our office portfolio did not see any reduction in rents or even escalations, which we believe is a result of focusing on grade-A properties with multinational tenants — a thesis we plan to continue in the fund,” he said.
Last year, the firm advised on two separate transactions in the last quarter of 2020 totaling around Rs 180 crore in securities backed by Mindspace Business Park (tenanted to Qualcomm) in Hyderabad and The Pavilion (tenanted to Aurbis) providing investors with yields exceeding 8.5%.
Moktan sees opportunity in office space as cash flow requirements are now putting pressure on developers and asset owners to raise funds by monetising the highest quality assets in their portfolio leased to bluechip multinational tenants.
The fund will focus on completed income-generating commercial real estate leased to multinational and bluechip tenants in Indian tech hubs with 7-9% annual rental yields and with a projected 17-20% internal rate of return over a 4–5-year holding period.
Speaking to TOI, Kunal Moktan, co-founder & CEO, PropShare Capital, said the fund has the lowest charges with a 0.5-0.7% annual management fee and 10-15% performance fee depending on the quantum of investment.
“We are evaluating a few large grade-A properties in Bengaluru and Hyderabad. While opportunistic investments are still available, the discounts that were available 6-9 months ago have significantly reduced. As optimism returns to the market and large multinationals revive leasing plans, a small window of opportunity continues to exist to invest in high quality assets,” said Moktan.
The fund is targeted at institutional investors, HNIs, family offices, and select sophisticated domestic and NRI investors. The minimum investment of Rs 1 crore is in line with AIF regulations.
PropShare Capital’s current investor base includes institutional investors, family offices, HNIs and ultra HNIs and senior and middle management of large tech, financial services and consultancy companies as well as founders of startups.
According to Moktan, there has been no rent loss in its properties let out to multinationals. “Our office portfolio did not see any reduction in rents or even escalations, which we believe is a result of focusing on grade-A properties with multinational tenants — a thesis we plan to continue in the fund,” he said.
Last year, the firm advised on two separate transactions in the last quarter of 2020 totaling around Rs 180 crore in securities backed by Mindspace Business Park (tenanted to Qualcomm) in Hyderabad and The Pavilion (tenanted to Aurbis) providing investors with yields exceeding 8.5%.
Moktan sees opportunity in office space as cash flow requirements are now putting pressure on developers and asset owners to raise funds by monetising the highest quality assets in their portfolio leased to bluechip multinational tenants.
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