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Kotak Realty Fund likely in talks to sell assets to Blackstone Group, Brookfield Asset Mgmt

Kotak Realty Fund is negotiating with US-based Blackstone Group LP and two Canadian entities including Brookfield Asset to sell its assets from two real estate funds raised in 2007, sources told the Mint.

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Kotak Realty Fund is looking to offload assets from two of it's real estate funds and is in discussion with US-based Blackstone Group LP, and two Canadian entities, Brookfield Asset Management and Canadian Pension Plan Investment Board (CPPIB), reports the Mint.

Kotak Realty Fund’s four special purpose vehicles (PSVs) have stakes in Chennai and Gurugram-based residential housing projects. Kotak acquired the projects in 2007 through its vintage funds-- Kotak Alternate Opportunities India Fund and Kotak India Realty Fund.

Kotak has reportedly hired Jones Lang LaSalle (JLL) India, a real estate service fund, for advice on the sales process.

Although the value of the said deal is not yet known, Kotak Realty Fund--a part of Kotak Investment Advisors Ltd--has kicked off the sales process and discussions are on between the companies.

The residential projects in Gurugram include Astaire Gardens that was built by BPTP Ltd. Kotak had invested around Rs 170 crore in the project, according to sources.

Kotak has also put on anvil some of its major Tamil Nadu projects. They include the residential township project Aavisa, which is located in Sriperumbudur, Tamil Nadu, and being developed by IVRCL Assets and Holdings. Another is a 140-acre township project, built by DivyaSree Developers, in Chennai.

The spokespersons of the stakeholder entities did not comment on the matter.

Kotak Realty Fund was set up in 2005 and since then it has raised USD 1.47 billion, invested in about 40 projects and financed many residential development encompassing millions of sq ft.

The fund has also generated exits of over USD 600 million and returned the principal amount in three out of its four domestic funds—KIREF-I, KIREF IV and V.
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