PropShare Capital, a tech platform that enables individuals to participate in commercial real estate investments, has raised Rs 80 crore for its Covid-19 distressed opportunities portfolio management scheme offering.
The firm closed the offering — Distress Opportunity Fund I (PDOF I) with online participation from over 150 investors include high net worth individuals, family offices, retail and institutional investors including a Japanese family office, in two weeks.
“This is the first time a fund this size has been raised online without distributors or middlemen. While the demand was in excess of Rs 500 crores, we chose to make a first closing within two weeks in order to be in a position to deploy money quickly as distressed opportunities become available,” said Kunal Moktan, co-founder & CEO, PropShare Capital.
He said that PropShare had already tied up an investment proposal to buy out a manufacturing company that was exiting its real estate investment in Hyderabad, which was let out to a multinational. “The price we are paying is 5% lower than what we had negotiated a couple of years ago. Since then the rent has increased by 5% every year.”
According to Moktan, companies with high leverage on their balance sheets are looking at selling commercial real estate, which are not part of their core assets at distressed prices, due to the Covid-19 crisis. “This is something that is happening globally and since the crisis, nearly $900 billion has been raised globally for investment in real estate,” he said.
PropShare is focused on commercial real estate that has been leased out to multinationals. The platform currently manages over Rs 330 crore of investments and allows investors to participate with a relatively low threshold of Rs 25 lakh-50 lakh. “All our tenants have paid rent during the lockdown so far. For multinationals with offshore centres in India, the cost of rent is very low and in dollar terms this cost has already come down by 5%,” said Moktan.