Jones Lang LaSalle India's investment arm looks to raise its second real estate fund

MUMBAI/BANGALORE: Property consultancy firm Jones Lang LaSalle India’s investment arm is looking to raise its second real estate fund with a total target size of around Rs 600 crore. The fund, to be raised in domestic market, will focus on investing in leased commercial assets across major office property markets in India, said two persons close to the development.

The global real estate services firm recently concluded its maiden real estate fund, Residential Opportunities Fund I, worth Rs 161 crore. Raised through its real estate investment management arm Segregated Funds Group, it will concentrate on the residential sector in India.

The close-ended fund will scout for leased office properties in commercial centers in India, including the Delhi-National Capital Region, Mumbai Metropolitan Region, Bangalore, Pune, Hyderabad, Kolkata and Chennai. The investment arm is planning to raise the fund after general elections in mid-2014.

“Jones Lang LaSalle Segregated Funds Group is exploring commercial office market space, but is yet to firm up a strategy,” JLL’s investment arm said while responding to ET’s email query. While the real estate sector continues to be bogged down by weak sales and rising inventories, private equity players are keen to invest in the sector, especially in the commercial segment.

The growing interest of investors in commercial properties can be attributed to lease rentals and capital values of these properties that have weakened over the last three years. The momentum of deals in the commercial realty space is likely to increase in the coming year as availability of exit mechanism will improve with the Real Estate Investment Trusts (REITs) that seem to be a possibility in India now.

Investor interest in leased office buildings has been increasing over the past few years as investors are trying to cash in on the weakness in property prices.