Indiareit to invest Rs 45 bn in real estate

New Delhi: The Piramal Enterprise controlled Indiareit Fund Advisors, a real estate focused venture capital and private equity firm, is planning to raise around Rs 4,500 crore for investing in the Indian property market. Of this, around Rs 700 crore is being raised domestically by the end of this month.

“Starting from January 2009, we will raise around $750 million to $1 billion from the global markets. This fund should hopefully close in six months,” said Ajay Piramal, chairman, Piramal Enterprise — a group with diverse interests in pharmaceuticals, healthcare, falconine and financial services.

This fund, raised from the global market, will have to conform with foreign direct investment (FDI) norms. Since February 2005, 100 per cent FDI is permitted in construction, as long as the projects are spread across a minimum area of 25 acres.

According to Cushman & Wakefield, foreign investors have raised nearly $30 billion since March 2005 for investing in Indian real estate. Of this, approximately $3 billion has been deployed.

Piramal said Indiareit have so far raised Rs 1,350 crore, which has been fully deployed. Indiareit has a $160 million offshore fund, registered at Mauritius. 3i, a private equity and venture capital firm listed at the London Stock Exchange, has invested around $40 million in Indiareit’s offshore fund.

The first domestic fund, according to Indiareit’s website, closed at Rs 250 crore.

The website also states that investments have been made in three properties that have a development potential of 1.7 million sq ft.