Indiabulls Asset Management Co. Ltd is launching its first commercial asset fund and plans to raise up to Rs. 1,500 crores to invest on office spaces. It will buy office spaces which will generate a stable rental income. Out of the Rs. 1500 crores, Rs. 1000 crores will be raised through random investors and Rs. 500 crores will be raised from select family offices and investors by means of co – investment. Read more on Investments
“This is an opportune time to do something different from what we have already done and investing in office assets seems to be a good option. We are already talking to asset owners in key cities, including Hyderabad”, said Ambar Maheshwari, CEO of private equity department in Indiabulls Asset Management.
However, Indiabulls is not the first company to buy office spaces to generate income by means of rent. Over the past few years, global investors such as Blackstone Group LP., Qatar Investment Authority and Canada’s Brookfield Asset Management Inc. have bought office spaces at popular locations in major cities across the world, which yield stable rental income. Maheshwari said that as the number of institutional investors is high, the ready office space is limitedly available. “But we are looking to buy assets in the mid – end segment, between Rs. 100 to Rs. 200 crores and will do 7 to 8 transactions with the new fund”, he said.
Indiabulls Asset Management is a unit of Indiabulls Housing Finance and has around Rs. 1,500 crores of assets under management (AUM). It is a relatively new entrant in the real estate private equity business. The income generated through rent will exceed the capital invested in buying the office spaces. Maheshwari said that Indiabulls will look to sell the office spaces it bought after five years of renting them out. The profits generated may be used to invest in real estate investment trust (REIT). Read more on Startup News