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Wednesday, September 12, 2012

Tata Realty & Infrastructure to float $500M international fund

A subsidiary of Tata Sons, the firm is an advisor to Tata Realty Initiatives Fund, which raised and deployed its corpus of $750 million in several realty projects in the country.

Tata Realty and Infrastructure Ltd (TRIL) is planning to raise two India-focused realty funds, including a $500 million international fund and Rs 300 crore ($55 million) domestic fund, according to separate reports in Business Standard and Business Line.

The reports said the domestic private equity fund will be used to invest in a chain of malls that the company is looking to put up across the country through a build & acquire strategy. At present, TRIL has malls under the Trilium mall brand and it plans to expand to ten malls in next three year’s time. It is at present scouting six locations for its retail mall assets.

The international realty fund will be focus on green field development in the residential and other segments of realty business. There is no clarity on the timelines for raising the funds.

TRIL, set up in 2007 to pursue opportunities in the real estate and infrastructure sectors, is a wholly owned subsidiary of Tata Sons, the holding company of the Tata group. It is an advisor to an offshore fund — Tata Realty Initiatives Fund (TRIF - 1) — with a corpus of $750 million (including a contribution from Tata Sons) for the development of real estate projects.

The fund has invested in Ramanujam IT SEZ in Chennai, mall and residential projects in Amritsar, Nagpur, Kochi and an IT office space which it had bought from Kotak Realty Fund. It is not clear if Tata Sons will also participate in the funding for the new proposed funds.

TRIL is looking to launch the Trilium mall brand in two formats -- one in the high-end segment and the other catering to the middle income segment. It is looking at cities like Coimbatore and Mysore for the same.

TRIL joins a queue of several India-focused PE firms looking to raise a whopping $5 billion to invest in real estate sector in India. With new AIF guidelines and poor state of investment climate, most of the funds are yet to begin raising money. Most of these fund houses have exhausted their earlier funds or some have come to a life closure forcing them to raise fresh capital.

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