Mumbai: The Godrej group is stepping into the commercial real estate space in the National Capital Region in a joint venture with Hero Cycles Ltd, starting with a one-million sq.ft office and retail project. Located at Gurugram’s Golf Course Road, the project will come up at a four-acre plot owned by Pankaj Munjal-promoted Hero Cycles. It is expected to be completed in the next three years.

According to two people aware of the matter, who spoke under condition of anonymity, the development is likely to entail a total investment of around 1,500 crore. Spokespersons of both the companies declined to comment on investment.

A Godrej group statement said Godrej Properties Ltd (GPL) and Godrej Fund Management (GFM) have formed a joint venture with Hero Cycles for the project. While GPL develops property, GFM is the group’s real estate private equity arm.

The deal marks the entry of Mumbai-based Godrej Properties in NCR’s commercial realty, while helping Hero Cycles monetise some of its land.

“The combination of Godrej Fund Management and Godrej Properties combines superior investment management capabilities with best-in-class development capabilities. We will do our best to ensure this development becomes a landmark development in NCR," Pirojsha Godrej, executive chairman, Godrej Properties and chairman, Godrej Fund Management said in the statement.

This is the second deal GFM has invested through its office development fund called Godrej Build to Core (GBTC), Karan Boralia, managing director and chief executive officer, said Godrej Fund Management. The fund has a corpus of $450 million, of which 50% has already been utilised so far. Its first investment was a commercial project as a part of a mixed used development at Vikhroli in Mumbai, Boralia said.

“We remain focused on investing in development office deals to build long term-term real estate markets that have strong fundamentals," Boralia said.

Munjal said over the phone that Hero will develop the land plot along with Godrej Properties into a Grade A office and retail space as part of its plan to monetise land parcels. He declined to further provide details on the investment.

Despite the property slowdown in NCR, a few real estate companies have been looking to enter the market, both in the residential and commercial space. Apart from Godrej Properties, builders like Shapoorji Pallonji and Kalpataru Group have recently entered the region.

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