Nuvama Asset Management, in collaboration with Cushman & Wakefield, has successfully raised approximately Rs 1,700 crore through the first close of its inaugural real estate fund. This significant capital influx comes primarily from domestic investors, including high-net-worth individuals (HNIs) and family offices. The fund aims to invest in the Indian commercial real estate sector, a domain traditionally dominated by global institutional investors. Anshu Kapoor, president and head of Nuvama Asset Management, expressed optimism about achieving a targeted fund size of Rs 3,000 crore within the next two quarters. He emphasized the resilience of the Indian commercial real estate market, noting its status as a prime investment opportunity. The newly established Prime Offices Fund will prioritize Grade A office spaces across India’s six major markets: Mumbai, Bengaluru, the National Capital Region (NCR), Pune, Chennai, and Hyderabad. These markets are responsible for over 70% of the country’s leasing activity, highlighting their importance in the commercial real estate landscape.
Investment Focus and Market Strategy
The Prime Offices Fund, classified as a category-II alternative investment fund (AIF), has a tenure of six years and is poised to invest in office assets worth over Rs 6,000 crore. This will be facilitated through project-specific leveraging strategies. Gaurav Puri, chief investment officer at NCW Asset Management, revealed that the entire fund corpus will be deployed over the next two years, targeting a portfolio size of 5-7 million square feet across India. The fund will explore investment opportunities across various asset categories, including new developments and completed leased properties. Notably, a robust deal pipeline has already been established for deployment. According to Anshul Jain, chief executive of Cushman & Wakefield for India, Southeast Asia, and APAC Tenant Representation, this first close signifies growing confidence in India’s commercial real estate market. Jain anticipates strategically deploying these funds to create world-class office spaces that redefine the future of work in India while also striving to deliver attractive returns for investors.
The Landscape of Indian Commercial Real Estate
The appetite for Indian real estate among institutional investors remains strong, particularly in office space, driven by steady economic growth. Major domestic and global funds, including Blackstone Group, Brookfield Asset Management, GIC, and Goldman Sachs, have made significant investments in the sector, indicating a robust interest in the Indian market. Nuvama oversees over Rs 4.41 lakh crore of client assets, catering to approximately 1.2 million affluent HNIs, and showcases a strong foothold in wealth management. Cushman & Wakefield’s extensive operations across 60 countries, with reported revenues of $9.5 billion in 2023, further solidify the joint venture’s potential for success. The collaboration between Nuvama and Cushman & Wakefield aims to create a comprehensive platform for commercial real estate investments, catering to the growing demand and evolving landscape of the Indian market. As the joint venture progresses, industry experts expect significant developments in the commercial real estate sector, emphasizing the importance of strategic planning and execution.
Conclusion
The joint venture between Nuvama and Cushman & Wakefield marks a pivotal moment in India’s commercial real estate landscape. With a strong initial capital raise and a clear investment strategy, the Prime Offices Fund is set to redefine investment dynamics.
- Significant Rs 1,700 crore raised from domestic investors.
- Focus on Grade A office spaces in major Indian markets.
- Strategic investment opportunities with a robust deal pipeline.
- Resilience in the Indian commercial real estate sector.
- Support from major global institutional investors.
- Potential to redefine the future of work in India.
