PropShare Capital Launches AIF

PropShare Capital is planning to raise Rs 700 crore through its maiden real estate fund called PropShare Real Estate Fund I (PREF I). The fund is being set up as an Alternate Investment Fund (AIF Category II) registered with stock market regulator Securities and Excha

BY Realty Plus
Published - Saturday, 06 Mar, 2021

PropShare Capital is planning to raise Rs 700 crore through its maiden real estate fund called PropShare Real Estate Fund I (PREF I). The fund is being set up as an Alternate Investment Fund (AIF Category II) registered with stock market regulator Securities and Exchange Board of India (SEBI). The fund will focus on completed income-generating commercial real estate leased to multinational and blue-chip tenants in the tech hubs of India. PREF I is targeting Grade A commercial properties at 7 to 9% annual rental yields with a projected 17 to 20% IRR over a period of 4-5 year hold period, the company said. PREF I has one of the lowest fees in the industry with a 0.5-0.7% annual management fee and 10-15% performance fee depending on the quantum of investment. The fund is targeted at institutional investors, HNIs, family offices, and select sophisticated domestic and NRI investors. The minimum investment is Rs 1 crore in-line with AIF regulations, the company said. PropShare Capital’s current investor base includes institutional investors, family offices, HNIs and ultra HNIs and senior and middle management of large tech, financial services and consultancy companies as well as founders of start-ups. The underlying real estate story continues to remain intact with leasing seeing a sharp recovery in Q2 (Jul-Sep ‘20) and Q3 (Oct-Dec’20) in the top 8 cities increasing 81% and 573% from Q1 respectively. Embassy REIT and Mindspace REIT have reported more than 99% rent collection during the Jul-Sep’20 quarter indicating that multinationals continue to be bullish in maintaining and increasing their outsourcing and R&D presence in India, it said. The target fund size of Rs 700 crores includes a Rs 200 crore greenshoe option. PropShare Capital estimates an initial closing in 60 days followed by a final closing over the next 6-12 months or earlier. The fund will primarily focus on distressed commercial properties emerging from the COVID-19 pandemic. PropShare Capital is a SEBI registered portfolio manager, investment advisor and a Category II Alternative Investment Fund manager.