Protego Real Estate Investors LLP announces that it commenced the marketing of the Protego WIRE Indian Office Development Fund ('the Fund'). Protego is seeking to raise up to US$150 mln. equity by, February 2008, the proposed first closing date. Further closings are expected to take the total invested equity to between US$300 and US$400 mln.
Protego's partner for the Fund is WIRE Commercial Partners ('WIRE') which is a part of the WIRE Group, a Singapore based property group which provides investment and real estate development services. WIRE will be responsible for day to day management of the developments, which will be carried out from WIRE's operations in India, these include; sourcing suitable opportunities, procuring planning and other consents, arranging project finance, marketing and letting.
The Fund will invest primarily in office development projects, in tier one and tier two cities in India. Protego is highlighting that the Fund will focus on developments that will be built to international building standards and specifications, as the Fund will be targeting major international corporates, as tenants, who will be seeking similar standards and specifications as they would expect to find in Europe or the US.
Net target returns (IRR) for the Fund will be in the region of 25%. The Fund will be structured as a closed ended fund with a seven year life, with an option to extend. In addition to the development fund, Protego will be structuring an Indian office standing investment fund, which will have the option to acquire the completed developments at the market valuation, once the development projects are completed. In addition the Fund has the capacity to acquire assets from outside of the development fund, should they be appropriate. It is anticipated that this fund will be launched in June 2009.
Charles Weeks, Head of Business Development at Protego said: "What is happening in India at the moment is nothing short of astonishing. From a real estate perspective there is huge primary demand from international corporates for quality office space - driven primarily by the cost benefits from outsourcing global IT and IT Enabled Services businesses to India, coupled with an extensive and highly educated labour force. It is estimated that demand for space will increase at between 30% and 35% pa compounded for the foreseeable future.
"Protego were introduced to WIRE through a corporate finance house based in Singapore with whom we have been working closely, in defining Protego's Asian strategy.
"WIRE is an exceptional team of individuals, put together specifically for the execution of this fund. They have extensive development experience both in India and the US. In addition, WIRE has arranged a number of strategic partners to the Fund, in order that the Fund can mitigate, as far as possible, the risks normally associated with investing in India. The strategic partners include a major US contractor which built a significant part of Silicon Valley, who will oversee the standard, quality and technology of build to ensure that it is appropriate and suitable for the end users. At the same time, WIRE has tied up with the a global leader in tenant sourcing and representation services, with coverage in over 60 markets including US, Asia, Europe and Latin America. Finally, WIRE has signed an agreement with one of India's largest construction and engineering organisations, covering all key disciplines, to ensure local delivery of buildings".
Iqbal Jumabhoy, CEO of The WIRE Group said: "WIRE sees with Protego a true partnership of skills and values, with Protego's impressive reputation amongst investors, combined with a track record in successful fund management, whilst WIRE brings local deal sourcing, tenant acquisition and the ability to deliver completed buildings to international standards in India. Most importantly, WIRE was impressed with
the strong values of Protego, which are consistent with our own.
"One of the issues with investing in real estate in India is building a pipeline of deals that com
