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Thursday, September 6, 2007

Real estate fund IndiaREIT is planning to come out with a $500 million offshore fund to invest in properties in Pune, Mumbai, Bangalore and Hyderabad

"The fund will have a green-shoe option of $200-250 million," said Ramesh Jogani, MD & CEO, Indiareit Fund Advisors.

Indiareit expects both individual and financial institutions, including insurance and private equity players from the US, Europe, the Middle East, Japan and South-East Asian countries, to investments in the fund.

The minimum investment size for individuals in the fund would be as low as $0.5 million, while institutions would have to shell out $5 million to get a pie of the fund, to be raised through distributors.

"There is a lot of euphoria for Indian real estate sector among the big PE players overseas and the company intends to partner them to become a major player in the country's real estate sector. Indiareit will invest the fund over a period of four years... All leading distributors would be engaged to market the fund," Jogani said. This is Indiareit's second offshore fund, expected to come out by the end of the current year.

Earlier Offshore Fund: Set up in March 2006, Indiareit Fund advisors had earlier came out with an $200 million offshore fund in which major private equity player 3i had invested $40 million.

Indiareit source said bulk of the investment in the fund had came from the Middle East while there were private equity investments from Singapore and the UK.

Domestic Fund: Recently, Indiareit had launched a Rs 350 crore domestic fund with a green-shoe option of another Rs 350 crore. So far, it has raised Rs 500 crore out of the fund and expects to close the fund in the next two to three weeks.

Related Stories:

1. HDFC, GE Capital, Indiareit and now 'Taj Business Hotels' join hands with Paranjpe Schemes' integrated township at Hinjewadi in Pune (India)

2. "Pune can absorb up to $2-3 billion in Foreign Direct Investment annually" Lalit Kumar Jain, president, Promoters and Builders’ Association of Pune

3. REITs — poised to gain ground

4. Indian Real Estate and Real Estate Investment Trust

5. Yes, be greedy when others are fearful, go ahead and "Scoop up some REITs", please!

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