Domiciled in Gujarat’s GIFT City, this is Kotak’s 13th real estate fund that will invest primarily in residential properties in India’s key cities.
It has secured an anchor investment of $500 million or more of Rs 4,068 crore from a wholly owned subsidiary of ADIA, bringing the sovereign wealth fund’s investment in Kotak Realty Fund to $1 billion in less than six months.
Prior to this, Kotak Investment Advisors allied with an ADIA entity to set up a $590 million or more Rs 4,800 crore real estate investment platform in June this year.
Domiciled in Gujarat’s GIFT City, the fund will invest in office assets across India with a focus on the six major property markets of Mumbai, Bangalore, Delhi-NCR, Pune, Hyderabad and Chennai.
“This is an opportunistic fund that can invest in various classes of real estate and equity assets, meaning both debt and equity. The Fund will primarily focus on investments in residential real estate. With the first closing of this fund, Kotak Investment Advisors has raised about $1.5 billion in real estate through multiple strategies in about a year and a half,” said Vikas Chimakurthy, CEO of Kotak Realty Fund.
With this new fund, Kotak Investment Advisors has raised, managed or advised more than $3.3 billion in its series of real estate funds.
“As an India-focused alternative asset manager, Kotak has played a key role in attracting global capital for various alternative asset investment strategies in India. Kotak’s real estate investment practice has consistently performed for 17 years through cycles and strategies,” Srini Sriniwasan, MD, Kotak Investment Advisors.
According to him, this track record has enabled Kotak Investment Advisors to emerge as a leading local alternative asset manager with a significant global base of limited partners who have repeatedly placed their faith in Kotak with significant participation in successor funds.
“This agreement expands our existing and long-standing relationship with Kotak. The new platform is primarily targeted at the significant demand for housing in India, driven by sustained economic growth and a shortage of urban housing clusters,” said Mohamed AlQubaisi, Executive Director of ADIA’s Real Estate Department.
This is ADIA’s fifth relationship with Kotak Investment Advisors for Indian real estate assets. Separately, the UAE-based sovereign wealth fund also committed $500 million earlier to a distressed fund backed by India’s largest homegrown alternative asset investment.
Established in 2005, Kotak Investment Advisors is part of Kotak’s Alternative Assets practice and has collectively raised, managed and advised more than $6.8 billion across different asset classes, including real estate, private equity, infrastructure, situation funds specials and investment advice.
Established in 1976, the Abu Dhabi Investment Authority is a globally diversified investment institution that invests funds on behalf of the Government of Abu Dhabi through a strategy focused on long-term value creation.
Against the backdrop of an ongoing policy review, increased investor confidence, increased transparency and sustained growth in demand for Grade A commercial office space, experts believe that momentum for investment in real estate Indian will continue to rise.
ADIA’s investment indicates that the appetite for Indian real estate among global institutional investors remains strong. In addition to large established domestic investors, global funds such as the Blackstone Group, Brookfield Asset Management, GIC, Xander, Ascendas, CPPIB, Warburg Pincus and Goldman Sachs are expanding their investments in the sector.