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Godrej Properties Ltd (GPL) has formed a residential development platform with Rs 770-crore of equity commitment.
The residential development platform will focus mainly on the development of the middle-income residential space in Mumbai, NCR (New Delhi) and Bangalore, apart from looking for opportunities in Chennai and Pune.
While the share of GPL in the investment platform would be 29 per cent, the balance would come from its partners, the company said in a filing to the stock exchanges.
The global investors’ group is led by Dutch pension services provider APG, one of the largest pension fund managers and real estate investors in the world, it also includes Sparinvest Property Fund II, a global real estate fund-of-funds managed by Sparinvest Property Investors.
The initial commitments would be in the ratio of 28:71 by GPL and the investor group, respectively. As opportunities emerge, the parties would take steps to nurture the platform.
Godrej Properties would be the “exclusive development manager’’ of the projects to be pursued by the platform for which it will receive a development management fee.
The platform will enable GPL to capture outright land purchase transactions in “currently dislocated market conditions’’ without deviating from its asset light model.
It is expected to generate substantial earnings over the next seven years contributing significantly to its growth, the company statement said.
Mr Pirojsha Godrej, Managing Director & CEO, Godrel Properties, said the association would help the company to source deals with large capital requirements in Mumbai, NCR and Bangalore, allowing it to enhance the number of projects launched while maintaining a “capital efficient land sourcing strategy’’.
Mr Sachin Doshi, Senior Portfolio Manager for APG in Hong Kong, said his company considered these tier I cities to continue to benefit from India’s urbanisation trends and they also represented the “deepest pools of residential demand in the country’’.
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