Cushman & Wakefield (C&W) and Nuvama Asset Management have formed an equal joint venture to set up a ₹3000-crore platform that will invest in office projects.
The Prime Offices Fund, slated as a six-year close-ended fund, is anticipated to launch in approximately six months, pending approval from the Securities and Exchange Board of India (SEBI).
“The platform that we intend to build will create great solutions for Indian investors,” said Anshu Kapoor, President, Nuvama Asset Management. The platform will have the fund management expertise of Nuvama and C&W’s expertise as a consultant in the commercial real estate sector. “Indian investors do not have access to this asset class,” he said, adding that it is a $100-billion opportunity that would double in 10 years.
The fund aims to attract high-net-worth individuals and family offices for fund-raising purposes. Assets are being identified in the top six cities: Bengaluru, Delhi, Pune, Mumbai, Chennai, and Hyderabad. Kapoor said that initial investment would be in around five to seven assets and investment in each would be in the range of ₹500-1,000 crore. “We are working on the deal pipeline,” he said. Investments would be in under- construction as well as fully leased assets. The expense ratio would be capped at 30 basis points.
Kapoor said that the two companies are in it for the long haul and once the current fund had provided an exit for its investors at the end of its tenure, another and larger fund would be set up. Most of the office space in India is in the hands of foreign institutional investors such as Blackstone and Brookfield, and the Prime Office Fund would attempt to challenge that dominance.
The platform has been in the works for about a year, said Anshul Jain, Managing Director, India and South-East Asia, and Head of APAC tenant representation at C&W. He noted that despite uncertainties and occupancy challenges, the Indian office market notably absorbed 41 million sq ft last year.
High-quality offices are being built and stock worth over ₹8-lakh crore will be added over the next 10 years in India.