PropShare Capital has launched its second fund, PREF II in order to raise Rs 500 crore. Additionally, PREF II will only concentrate on finished class-A income-producing commercial real estate leased to big-name international and Indian tech companies. A green shoe option worth Rs. 200 crore will also be included in the proposed fund. Kunal Moktan, CEO and Co-founder, PropShare Capital, said, “The current high inflation and interest rate environment has increased yields on all asset classes including commercial real estate. Since yields are inversely proportional to asset prices, this has led to high-quality Class A offices being available at distressed prices. Developers are under pressure as high interest-bearing debt used to purchase land or fund construction is putting severe pressure on cash flows, forcing them to raise capital by monetising assets".
"Given the softness in the investing environment and lack of capital providers, only the highest quality assets are currently tradable. This has opened a unique one-time window for opportunistic investors to acquire quality Class A assets at above-market yields", He further adds. According to the company, PREF I has been fully deployed across four office assets in Bangalore and Mumbai which are 100% leased to Grade A tenants like LG, Tata Finance and 24/7 AI. The Indian office market is forecasted to perform strongly on the back of increased outsourcing in the aftermath of the recession in the West which is driving multinationals to open new or expand existing Global Capability Centres (GCCs) in India which offers up to 7-8x lower costs. Domestic technology companies are also expanding aggressively with most large companies now asking employees to return to the office fuelling the demand for office space.
The fund's target audience includes family offices, institutional investors, HNIs, and a select group of well-heeled domestic and NRI investors. In accordance with AIF guidelines, the minimum investment is Rs 1 crore. The current investor base of PropShare Capital consists of institutional investors, family offices, HNIs and ultra HNIs, senior and middle management from major financial services, technology, and consulting firms, as well as the creators of tech start-ups. A wholly owned subsidiary of Property Share, a tech-enabled platform for commercial real estate investments with institutional ownership and investors including Westbridge Capital, LightSpeed Venture Partners, Pravega, and BEENEXT, is called PropShare Capital.
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