Boston-based Taurus Investment Holdings LLC and Sage Funds Management Pvt Ltd from India are raising $250 million offshore capital, to set up an India-focused commercial real estate platform and co-develop projects with regional developer partners, said a top executive.
The overall investment focus will be on south India, excluding Hyderabad, and around 70% of the corpus will be invested in office projects and the remaining portion in retail assets. The venture will mainly look at investing equity capital in and developing mostly greenfield projects and very selectively, acquisitions.
Both the developer and investor partners would bring in capital for the projects and build them.
Taurus Investment, which describes itself as an investor, developer and operator globally, already has a large, mixed-use development in Trivandrum, called ‘Taurus Downtown’. Of the total six million sq. ft. of development, Taurus has a joint venture partnership with Bengaluru’s Embassy Group for the office component in the project.
“...India is now seen as a quasi-mature, sizeable market with depth and realistic return expectations. That’s why we have kept this platform at a manageable size and want to do greenfield developments because that’s where the opportunities are, instead of acquisitions. Around 30% of our global portfolio has been built by us. We are very comfortable taking development risks but open to acquisitions, selectively," Ajay Prasad, managing director-India, Taurus Investment said in an interview.
A Sage spokesperson confirmed the partnership with Taurus for the platform.
Prasad said that for the office projects under the platform, Taurus would prefer to invest alongside Embassy Group and build on their strong, existing relationship.
“We are in active discussions with Embassy for a couple of project investments in Bangalore. We want to have a pipeline of projects before calling out capital from investors," he said.
An Embassy Group spokesperson confirmed that they are in talks with Taurus for the same.
Taurus and Sage are tapping investors who range from large single, family offices to pension funds and insurance companies in US, UK, Switzerland, Germany and west Asia.
“..Many of the investors are first-time investors in India and not exposed to the country yet. Perception about India from an external investor’s perspective has changed.
The REIT listing in India has been very beneficial because it is an instrument that people see as a coming of age thing for any real estate market," said Prasad.
Embassy Office Parks, which saw Embassy Group and Blackstone Group Lp joining hands, is India’s first real estate investment trust or REIT, housing 33 million sq. ft of office and hospitality assets. The REIT issue was launched in March and raised ₹4,750 crore.
Global investors have been very actively investing in buying out office assets in India, as the commercial real estate market has shown good growth in rentals and demand.
Once the first tranche of capital is raised by Taurus and Sage, the ongoing Trivandrum project will be the seed asset for the platform and will be funded from this capital. Initial investment has been made from Taurus’ private capital pool from existing limited partners (LPs) and proprietory capital.
Separately, Taurus has also applied for an alternative investment fund (AIF) with market regulator Sebi, to raise domestic capital. It is also looking to invest in the co-living space with regional developer partners and in mid-income housing projects as well.