New Delhi: An equity fund focused on the Indian real estate market, Red Fort Capital Advisors Pvt Ltd, plans to launch a Rs1,000 crore domestic fund which will buy land in key cities across India, joining the race to build land banks as also invest in redevelopment in Mumbai and other cities.
Red Fort is looking to raise the corpus from high net-worth individuals, corporates, trusts and institutions in India. “It is an open-ended fund which means investors have an option to exit whenever they want to,” Subhash Bedi, director and partner, Red Fort Capital said. “The fund will give investors an opportunity to invest in real estate. We expect to return money to investors in 3-5 years.”
Red Fort is a Cayman Islands-based fund that has about 10 investors, including government institutions, insurance companies and pension funds. It has raised Rs2,000 crore from these investors and invested Rs1,000 crore in India in the three years it has been around.
Red Fort expects to deploy the domestic fund completely in the next one year. Around 80% of the fund will be invested in the acquisition of land.
The fund is looking to acquire 1200-1500 acres of land in 15-20 top cities in India such as Delhi and its suburbs, Mumbai, Chennai, Bangalore, Kolkata, Hyderabad and Pune. “We are in talks with corporates who want to unlock the value of their land assets,” Bedi said.
The fund could either look at selling the land assets to realise the return on investment or it could look at partnering with a real estate developer to develop the land parcels.