Kishore Biyani’s real-estate investment arm is all set to launch a hospitality fund that will invest in hotel projects.
MUMBAI: Kishore Biyani’s real-estate investment arm is all set to launch a hospitality fund that will invest in hotel projects.
The details of the hospitality fund, including the entire corpus, are not being made public. But the market buzz is that it should be somewhere around $350 million.
Promoted by Future Group, Kshitij Investment Advisory Co Ltd (KIAC) is developing/managing 56 properties across the country.
It currently manages two retail-focused real estate funds: Kshitij Venture Capital (KVC) Fund ($80 million) and Horizon International Fund with a corpus of $350 million.
While the KVC corpus is fully committed its capital to develop 13 retail projects across metros, mini-metros and tier-2 towns, the Horizon International Fund has already committed over 70% of the $350 million for various real estate projects.Shishir Baijal, CEO, Kshitij Investment Advisory Co Ltd, refrained from making any comment.
Another reason being cited was them being in the silent phase as Biyani’s financial arm Future Capital is all set to hit the market in the near future.
A reliable industry source said: “The fund should be in a position to hit the market anytime. In fact, if everything goes as per the plans the announcement can be expected within the next 30-45 days,” said the source.
The source also said the hospitality fund will not only invest in the hotel projects being partnered by group companies but also consider those being developed by others.
For instance, Kshitij Investments has already committed investments in the Market City projects being developed by the Ashok Ruia Enterprises Pvt Ltd (now merged with the BSE-listed Phoenix Mills Ltd).
AREPL has acquired large properties in Kurla (Mumbai), Whitefield (Bangalore), Vellachery (Chennai), Nagar Road (Pune), Raipur and has signed term sheets for other properties in Tier A & A- cities.
“From what I gather, the initial investment will certainly be in the hotel/serviced apartment projects being commissioned as part of the Market City developments across the country,” said the source.
On Market City concept is, Baijal had said that these will be positioned as city centre large-scale mixed use retail and leisure-led real estate projects with size typically in excess of 2 million sq ft.
“This will include standalone malls and mixed used retail developments like convention centres, three-star, four-star and five-star hotels, service apartments, commercial offices, residential apartments and community centres, besides public spaces,” Bijal had said.
Kshitij has already launched its first two projects in Mumbai — Orchid City Centre at Bombay Central and Milan Mall at Santacruz (suburban Mumbai).
These are part of the integrated asset management company’s management contract arrangement with Future Group’s leased out retail space in shopping malls across the country.
Kshitij’s first two green field properties (Ahmedabad and Baroda) are nearing completion and are expected to get operational by 2007-end or early 2008.
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