Indian real estate developer Sobha has bought into a fund management business owned by real estate agency Savills and Indian company Nichani Group.
PNC Menon, billionaire and founder of Sobha, has become a director at Rootcorp Investment Management, which is seeking capital for a new Indian real estate fund.
Vice president Charles Phillpot told IP Real Estate that Rootcorp is looking to raise up to $300m (€271m) from European and North American institutions, as well affluent non-resident Indians (NRIs).
The India Debt and Yield Opportunities Fund will aims to generate 20% returns by investing in a range of property assets and developments across India and provide capital to mid-size developers in the country.
Rootcorp will co-invest at the fund level and Sobha can co-invest up to 30% in individual projects.
Suresh Nichani, vice chairman and director at Nichani Group, said Rootcorp would begin by focusing on India, but its longer-term plans were to invest internationally, including in Europe.
Sobha, which has invested across India, has recently turned its attention to London and other global capital cities.
The formation of Rootcorp goes back to 2007 when Nichani Group and Cordea Savills (the fund management business of Savills at the time) formed an Indian fund management joint venture. John Partridge, founder of Cordea Savills, became chairman of the new entity, Cordea Nichani.
That year, Cordea Nichani sought to raise capital for an Indian real estate fund.
In 2012, Savills assumed control of Cordea Savills’ stakes in the joint venture and the following year its name was changed to Rootcorp. Partridge, now executive chairman of Cording Group, is chairman emeritus and is an independent director of Rootcorp.
Phillpot and Nichani confirmed that Savills Investment Management (which changed its name from Cordea Savills earlier this year) was not involved in the Rootcorp.
Rootcorp is hoping to capitalise on growing interest in Indian real estate among global institutional investors. Nichani said international real estate investors faced a lack of “credible platforms with end-to-end delivery capability” in India.
Rootcorp said it has the capability to deliver projects of up to 8m sqft through Sobha – which already has 49 ongoing residential developments in the country – and a number of “strategic alliance partners”.
“India requires a city the size of Chicago to be built every year to house its growing population”, Nichani said.
The new fund will invest in the cities of Bangalore, New Delhi, Mumbai and cities in the western corridor, such as Pune and Ahmedabad.