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INDIAREIT Fund Advisors Pvt.

Ltd

FREQUENTLY ASKED QUESTIONS

Prepared by

INDIAREIT Fund Advisors Pvt Ltd


(IFAPL)

INDIAREIT Fund Scheme V

Last Update: April 2013

Disclaimer

This publication has been prepared by INDIAREIT Fund Advisors Pvt Ltd solely for the information of its clients. This document is being furnished on
a strictly confidential basis. It is not intended as an offer or solicitation for the purchase or sale of any financial instrument. It is meant for use by the
recipient and not for circulation and is not to be copied or made available to others. This document is for information purposes only and does not
constitute an offer for participating in INDIAREIT Fund. Any investment in INDIAREIT Fund must be done on the basis of Private Placement
Memorandum and Offering Documents of the respective Fund and this report may only be distributed to those eligible to receive those documents.
As a general report, this document represents the views of INDIAREIT Fund Advisors Pvt Ltd in relation to the Indian economy and the real estate
industry. The information is based on material that is believed to be reliable. While reasonable care has been taken to ensure that the information
contained herein is not untrue or misleading at the time of publication, INDIAREIT Fund Advisors Pvt Ltd makes no representation as to its accuracy
or completeness. The information herein is subject to change without notice. Nothing in this document is intended to constitute legal, tax, securities
or investment advice, or opinion regarding the appropriateness of any investment. Neither INDIAREIT Fund Advisors Pvt Ltd, INDIAREIT Offshore
Fund, INDIAREIT Investment Management Co, any of the INDIAREIT Funds nor any of their officers or employees accept any liability whatsoever
for any direct or consequential loss arising from any use of this publication or its contents. The information provided herein is subject to being
updated at regular intervals

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Table of Contents

1. WHY REAL ESTATE FUNDS?


2. ABOUT INDIAREIT
3. EMPLOYEE & COMPENSATION DETAILS
4. INVESTMENT TEAM, STRATEGY & RESEARCH
5. FUND INFORMATION / INVESTMENT OBJECTIVE
6. INDIVIDUAL INVESTEE PROJECTS
7. LAND ACQUIREMENT, OWNERSHIP RIGHTS, REAL ESTATE DEVEPMENT & TAXATION
8. CORPORATE GOVERNANCE/SPONSORS

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GLOSSARY OF TERMS USED IN THIS DOCUMENT

1. INDIAREIT Domestic Fund Scheme I First domestic scheme launched by INDIAREIT

in April 2006. Also referred to hereinafter as Domestic Fund I or Domestic Scheme I

2. INDIAREIT Offshore Fund Offshore fund (domiciled in Mauritius) launched by

INDIAREIT in October 2006. Also referred to hereinafter as Offshore Fund or IOF

3. INDIAREIT Domestic Fund Scheme III Second domestic scheme launched by

INDIAREIT in July 2007. Also referred to hereinafter as Domestic Fund III or Domestic

Scheme III

4. INDIAREIT Domestic Fund Scheme IV Third domestic scheme launched by

INDIAREIT in October 2009. Also referred to hereinafter as Domestic Fund IV or

Domestic Scheme IV

5. Mumbai Redevelopment Fund Fourth domestic scheme launched by INDIAREIT in

March 2012. Also referred to hereinafter as MRF.

6. INDIAREIT Fund Advisors Pvt Ltd Investment Manager to Domestic Scheme I,

Domestic Scheme III, Domestic Scheme IV and Investment Advisor to IOF. Also

referred to hereinafter as IFAPL

7. INDIAREIT Investment Management Co Manager (domiciled in Mauritius) to IOF.

Also referred to hereinafter as IIM Co

8. INDIAREIT Funds Collectively, the Domestic Fund I, Domestic Fund III, Domestic

Fund IV, MRF, Domestic Fund V and IOF.

9. Domestic Funds Collectively, the INDIAREIT Domestic Fund Scheme I, INDIAREIT

Domestic Fund Scheme III, INDIAREIT Domestic Fund Scheme IV, INDIAREIT

Mumbai Redevelopment Fund and INDIAREIT Domestic Fund Scheme V

10. Private Placement Memorandum for INDIAREIT Domestic Fund Scheme V - Also

referred to hereinafter as PPM for INDIAREIT Domestic Fund Scheme V

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11. Offering documents - Includes the PPM, Contribution Agreement, and the marketing

documents including the Presentation for INDIAREIT Fund Scheme V

Section 1: Why Real Estate Funds ?

1.1 What is the A real estate fund typically reduces the risk profile of real estate as an
general asset class by offering a diversified investment portfolio managed by
benefit of experienced fund managers. Thus, it provides the dual benefit of a
investing in defensive investment alternative as well as a hedge mechanism by
a real estate offering an alternative asset class.
fund?
Hedging occurs through portfolio diversification, which is through large
location spread and number of projects included in the corpus. Also,
given the large sums of money typically available at the disposal of real
estate funds, their cost of procurement is generally expected to be lower
than for investments made by individuals.

The INDAIREIT Funds enter a project typically at land cost stage. Thus,
the entry cost of the funds investment is far lower than that of an
individual investor.

1.2 How should The key risks involved with investing directly in to real estate projects as
investors compared to investing in real estate funds are as under:
look at
investing Concentration Risk (Please refer 1.1 above)
into Real A real estate fund enables diversification of an investors
Estate investments into various geographic locations, sectors and
funds vis-- developers thus spreading the risks across a broader portfolio
vis Investing directly into real estate exposes an investor to risks of
investment a specific location and sector
into direct
real estate Execution risk
property in Investments by a real estate fund are managed by professionals
the current and are subject to rigorous due-diligence as well as compliance
market? norms for cost, quality and timely implementation
Further, with the assistance of real estate experts a real estate
fund is able to leverage this skill set across its various
investments
Direct investments into real estate might expose the investments
to execution capability risks of a single/few developers
Further, with extensive legal clearances required before
commencing real estate development in India and myriad of land

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title regulations, investments through a real estate fund helps to


mitigate these risks

Entry/Financial risks
As with any investment, the entry cost is a significant
determinant of the return potential
Fund allows entry at same level as a developer, which an
individual flat buyer cannot enter

Further, with its defined structure returns from a real estate fund
might be more professionally disbursed back to the investors, rather
than in case of individual investments wherein there might not be any
pre-defined exit/closure durations

1.3 Indian Real The coming decade will be different from what the Indian
Estate Real Estate industry has witnessed in the past one. In the residential
Going Ahead market, sentiments are lukewarm, but not significantly weakened.
Markets where the prices have maintained their levels are performing
well despite higher interest rates due to reasonable affordability. The
commercial market segment in the country was under severe stress
over the past couple of years due to the global economic slowdown.
However, the sector has consolidated itself and is now entering a growth
phase. Key factors which will determine the future growth of Indian Real
Estate are easing liquidity, right product mix with size / pricing to
ensure affordability, ability to preserve value / ride cycles and strong
execution capabilities.

Section 2: About INDIAREIT

2. 1 Name & INDIAREIT Fund Advisors Pvt. Ltd.


Address of Ground Floor, Piramal Towers,
the Indian Peninsula Corporate Park,
Fund G.K.Marg, Lower Parel,
Manager / Mumbai 400013, Maharashtra
Indian India
Advisor
INDIAREIT Fund Advisors Pvt. Ltd. acts as the Manager to Domestic
Funds and as the Indian Advisor to INDIAREIT Offshore Fund
Name of Bhushan Sawant, Director - Investor Relations at IFAPL
contact
persons
Telephone Tel: (91)(22) 6151 3440
Fax: (91)(22) 6151 3444

Email mail to: bhushan.sawant@piramal.com


Website www.indiareit.com
2. 2 What is IFAPL has its registered office at Mumbai, India and was incorporated in

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the legal July 2005 as a private limited company under the Companies Act, 1956.
status of the
INDIAREIT INDIAREIT Domestic Funds are registered as domestic venture capital
entities? funds under SEBI (Securities & Exchange Board of India). The norms
and statutes of SEBI govern the functioning of the Domestic Funds.

The Domestic Funds are organized as trust(s) under the INDIAN


TRUSTS ACT, 1882. IL& FS Trust Company acts as a Trustee and
performs the fiduciary duties on behalf of the investors.

INDIAREIT Offshore Fund is a company incorporated in Mauritius in


September 2006 as a public limited liability company and registered with
the Financial Services Commission, Mauritius as a Category I Global
Business License Company to conduct the business of private equity
investment in Indian real estate
2. 3 Please INDIAREIT has raised and advises a corpus over US$900m spread across
supply us five funds and two third party mandates and across the unlisted and
with a brief listed space:
history of
the Size INR Offshore & Special
INDIAREIT Domestic Funds Size
Cr Situation
Funds. Domestic Fund Scheme 430 Offshore Fund I $200m
Domestic Fund Scheme Trinity Capital Plc (AIM
585 $206m
III listed)
Domestic Fund Scheme
892 Trafalgar / F&C REIT $36m
IV
Mumbai Redevelopment
400
Fund
3i Investments was the cornerstone investor in INDIAREIT
Offshore Fund(with an investment of USD 40 Mn)
INDIAREIT Offshore Fund has a mix of Institutional Investors and
High Net Worth Individual Investors
Over 6,000 investors have chosen INDIAREIT for their asset
allocation into real estate through the Domestic offerings

Funds Deployed & Exits


The respective series of Domestic and Offshore funds are
committed across 25 different projects
Total area under development exceeds 64 Mn Sqft
Proven and consistent track record of round tripping investments,
with exits across each of our funds and across majority of
development partners and asset types

Fund Type Commitment Corpus Retuned


Domestic Fund I 100% 66%
Offshore Fund 100% 43%
Domestic Fund III 100% 24%
Domestic Fund IV 90% -

Funds Valuations

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Please find below the Terminal Valuation:

Fund Type Valuations (Money Multiple) *

Apr Mar Mar Mar Mar Mar


200 20082 200 20104 20114 20125
71 93

1st Domestic 1.81 2.27x 1.99 1.74x 1.74x 1.67x


Fund x x

1st Offshore NA 2.60x 2.18 1.84x 2.02x 1.80x


Fund x

2nd Domestic NA NA 1.54 1.44x 1.90x 1.78x


Fund x

3rd Domestic NA NA NA NA NA 1.92x


Fund
1.Pre tax multiple by Trammel Crow Meghraj in Apr07
2.Pre tax multiple by Knight Frank in Mar08
3.Pre tax multiple by DTZ in Mar09
4. Pre tax multiple by JLL in Mar10 & Mar11
5. Pre tax multiple by CBRE in Mar 12 post tax multiple for
3rd Domestic Fund

Please refer the newsletters for further updates.


2. 4 What IFAPL believes that it stands apart from other managers/advisors on
makes you account of the following:
different
from Team Structure & Investment Strategy
competing
real estate A team of investments professionals led by an experienced ex-
fund developer
managers / Project structuring with an aim to balance safety as well as
advisors? returns
Investments focused on Growth Cities
Proactive sectoral analysis to identify key gaps in demand supply
Multi-pronged Investment screening
Rich experience base in real estate development enables intrinsic
capabilities to carefully analyse various trade nuances while
finalizing deals
Careful deal structuring with in-built downward protection
Leveraging partnerships with leading third-party valuers, auditors
and investment banks
Complete support to developer partners
Participation and involvement in projects, beyond the role of
passive investors

Key Milestones Achieved

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One of the fastest deploying funds


One of the first to undertake development of projects
First fund to declare independent valuations
First fund to complete exit in the projects and return capital to
investors
Large city focused fund - Projects spread across Mumbai, Pune,
Chennai, Bangalore & Hyderabad
Largest portfolio of assets in Mumbai Key business centre with
huge pent up housing demand
Developer focused fund Multiple deals with development
partners, with over 64 million sq. ft of area under development
2. 5 Please IFAPL advises only India focused funds and hence cannot comment on
comment on returns in the Asia Pacific Market at large.
IFAPLs
target For Domestic Fund V, gross target IRR is 24% +.
market
expected
returns for
the
INDIAREIT
Funds versus
expected
returns for
Asia-Pacific
institutional
grade
property?
2. 6 When do
you plan to IFAPL will advise on the launch of the next series when the previous
raise the funds advised by it have respectively been able to successfully deploy at
next fund? least 70% of their existing fund corpus and there is an identified
What is the potential pipeline of forthcoming projects. IFAPL may also advise on the
policy with launch of other parallel schemes with a different objective/investment
regard to charter for e.g. mezzanine fund / yield based fund / redevelopment.
running two
funds
simultaneous
ly?
2. 7 Will a Any new fund will have its own independent investments and will not
current fund take over any of the investments from earlier funds.
take over
investments However, domestic and offshore schemes invest in parallel and also co-
from, or co- invest into projects that meet the relevant regulatory requirements.
invest with,
earlier funds For deals which are in excess of Rs 100 crores and which are compliant
or active with FDI policy, the Investment Advisor may offer co-investment
funds beside opportunity to any of the Offshore Funds/investors being advised by it.
the Such allocation to offshore fund / other investors could be up to 70% of
investments the deal size as may be determined by the Investment Committee.
made
parallel with Further, for any investment opportunity where the Investment
the onshore Committee decides not to take up the entire portion of the investment

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INDIAREIT Fund Advisors Pvt. Ltd

fund under opportunity for any reason including but not limited to risks related to
the same concentration, the Investment Advisor may at its discretion offer such
General excess portion of the available investment opportunity to the Sponsor
Partner? Group and / or other investors.
What is the In such a situation, the terms of the investments by the Sponsor Group
policy?
and/or the third party investor will not be better than the terms at which
Fund V may invest in Investee Companies.

2. 8 Please INDIAREIT Domestic Fund Scheme I (final close April 2006)


provide us Piramal Enterprises Limited INR 300 Mn
with a list of General Insurance Corporation INR 100 Mn
the largest United India Insurance Company INR 50 Mn
investors in
each Fund INDIAREIT Offshore Fund(final close October 2006)
3i Investments Plc USD 40 Mn (Cornerstone Investor)

INDIAREIT Domestic Fund Scheme III (first close July 2007)


Piramal Enterprises Limited INR 350 Mn

INDIAREIT Domestic Fund Scheme IV (first close June 2010)


Piramal Enterprises Limited INR 350 Mn

INDIAREIT Mumbai Redevelopment Fund (first close April 3, 2012)


Piramal Enterprises Limited INR 37.5 Cr
2. 9 Give Neptune Group
details of First generation Indian real estate development company, which
major has created a diversified portfolio of real estate development
developers projects mainly in Mumbai Metropolitan region since its inception
that the in 2004
INDIAREIT It has completed projects of over 3 million sq. ft. It has ongoing
Funds are projects in and around Mumbai with an area under development
working with ~ 20 million sq. ft. and developable land in Nagpur, Hyderabad,
Cochin, Chennai, Vishakapatnam.
Indiareit had 2 investments with Neptune group Neptune
Evolution Park, a premium commercial area development in
Mumbai which has been completely exited in 2011 with an IRR of
~ 30% and an entity level investment where the fund has
exposure to all the projects being developed by Neptune Group.

Ariisto Group
More than 3 decades of experience in real estate
Executed few of the biggest Slum Rehabilitation Projects in the
country for the agencies of Government of Maharashtra for the
prestigious projects of Mumbai Urban Transport and
Infrastructure Projects (MUTP & MUIP). Has also developed a
number of other standalone luxury Apartment Buildings having

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over 300 apartments in suburban Mumbai


Primarily a Mumbai based developer with ~ 20 million sq. ft.
under Development in Mumbai.
Indiareit had done two investments with Ariisto Group A
Residential project in Santacruz and a Residential cum Retail
project in Goregaon while the other investment in a Transferrable
Right project at Mahul, Chembur. Both the investments have
been partially exited.

Marvel
Marvel group promoted by Mr Vishwajeet Jhavar, aged 43, an
engineering graduate has been into real estate development
in Pune city for more than a decade
Strong execution capability with 1.3 Mn sq ft (16 projects)
already delivered and a further 15.3 Mn sq ft (38 projects)
under construction
Excellent market reputation in obtaining prime city centric
land parcels, quick project execution and delivery of premium
residential apartments to end customers
Strong network amongst HNI landowners and intermediaries
with de-facto RoFR (Right of First Refusal) on premium city-
centric parcels;
Strong client network of HNI clients enabling developer to
have loyal base of investors for sale of apartments and
powerful brand in Pune synonymous with luxury residential
projects enabling the developer to command a premium on
selling prices vis a vis competition
The group has a team strength of more than 800 personnel,
experienced and professional management at the helm of
affairs with a very strong in house development and sales
teams

Paranjape Schemes (Construction) Ltd


ISO 9001:2000 accredited company, with over two decades of
experience
Has already completed over 150 projects with more than 8 Mn sq
ft. of saleable area
Ongoing 45 projects, with saleable area of more than 20 Mn sq
ft.

Srinivasa Shipping & Property Developers (SSPDL) Group


Listed on the Bombay Stock Exchange with over 18 years of
experience in real estate development

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It has successfully executed various residential/ commercial


projects in Chennai, Bangalore, Secunderabad and Hyderabad
INDIAREIT has partnered with SSPDL Ltd for developing projects
spread over 3 locations in Chennai, Bangalore and Hyderabad

Skyline Group
25-year old group, active in South India
Has concluded more than 60 projects, spread over 4 million
sq ft
More than 2.5 million sq ft under construction with a value
of USD 160 Million
INDIAREIT has 2 investments with Skyline Group with
projects spread across Bangalore, Mangalore, Cochin,
Chennai & Mysore
Amsri Group
More than decade of experience in Hyderabad
Developed over 3 mn sq ft
Land bank of over 1,700 acres to be jointly developed with
various renowned partners/investors like INDIAREIT, Smith
Management LLC and DLF
INDIAREIT has partnered with Amsri for developing ~ 13 mn sq.
ft. spread over 4 projects in Hyderabad

Samira Habitats
Has more than a decade of experience in Alibag & Navi Mumbai
Executed primarily residential layout development projects of
over 400 acres across Alibaug
INDIAREIT has partnered with Samira Group for developing
projects spread across multiple land parcels in Alibaug & Panvel

Omkar Realtors & Developers Private Limited (ORDPL)


Established in 2003, ORDPL has developed into one of the
leading real estate developers in Mumbai for Slum Rehabilitation
Scheme (SRS)
In the early years, they specialised in vacating slum sites and
securing all relevant SRA approvals. Subsequently they sold
freesale FSI / slum TDR in the open market
ORDPL moved into execution of real estate residential projects on
a larger scale since 2007-08. Since then, ORDPL has successfully
completed 9 residential & commercial projects with 1.8 Mln sq. ft.
of construction area
ORDPL has 26 ongoing projects with approx. saleable area of
12.44 Mn Sq. Ft

Ambience Group
More than 3 decades of experience in real estate
Executed more than 250 small and big projects over the years in
and around Delhi and Gurgaon, some of the major ones of which
are as follows:
"Ambience Mall", Gurgaon (the largest operational retail
shopping mall in India (Source: Jones Lang LaSalle Meghraj)
popular all over India for one km of shopping experience on

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each floor,
the "Lagoon" residential complex (a ready-to-move-in
residential apartment complex with 345 units)
an eight-floor corporate office tower
constructed "Leela Kempinski" (a hotel with 322 rooms and
90 service apartments) owned by a Group Entity
All the above a part of the groups premium "Ambience
Island" township at Gurgaon
"Ambience Mall", Vasant Kunj, New Delhi (strategically
located adjacent to Nelson Mandela Road, which is enroute to
the international airport)
The Kempinski Ambience Hotel, Shahdara, Delhi a 480
room 5 star hotel which was recently opened
Apart from above, Ambience has also developed various
residential/commercial properties in posh colonies of South
Delhi.
The group is promoted by Raj Singh Gehlot, a Chartered
Accountant with vast experience in construction and real estate
industry

Section 3: Employee & Compensation Details

3.1Please detail Profile of the Key Members of the Investment Team


IFAPL staff
resources split Khushru Jijina Managing Director
by function and
geography and Mr. Khushru Jijina is a Chartered Accountant with an illustrious career spanning
give brief over 2 decades in the field of real estate, corporate finance and treasury
profile management and has been with the Piramal Group for around 12 years. He
was a key member of the founding team of INDIAREIT in 2006 and was
instrumental in raising two domestic funds (together Rs. 1,014 crores) and the
Offshore Fund (US $ 200 mn) and was also responsible in deploying a large
proportion of these investments. Mr.Jijina was reinducted in the senior
management of INDIAREIT in September 2012 and is now designated as the
Managing Director. From 2010, as the Managing Director of Piramal Realty,
Mr.Jijina was spearheading the groups foray into real estate development -
Piramal Realty has rapidly built a pipeline of over 20 million sq. ft. in Mumbai
and aspires to build high quality living and work spaces through customer
centric design and strong execution. Prior to this, Mr.Jijina was the Executive
Director in PiramalSunteck Realty, where he was responsible for a portfolio of
projects spanning Mumbai, Navi Mumbai, Nagpur, Jaipur and Oman and
oversaw all aspects of their execution. Mr.Jijina joined the Piramal Group in
2001 as the Vice President-Treasury and had been instrumental in securing
debt at the lowest cost for the group, setting new benchmarks in the debt
market. He started his career with Rallis, a TATA Group company, where he
held several important positions in corporate finance over a span of 12 years.

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Arvind Pahwa Executive Director

Mr. Pahwa has over 30 years of experience in Indian real estate in all aspects of
the business including development, investment and asset management. Prior to
joining Indiareit, Mr. Pahwa was the CEO of South Asian Real Estate Group (2010-
2011) a PE and development platform. For the period of 2009-2012 he was also a
Non Executive Director on the Board of Trinity PLC an AIMS listed RE fund
.Preceding that he was the head of JP Morgan RE Fund (2006-2009) in India where
he was involved in raising USD 350mn and investing USD 170mn. During the same
time Mr. Pahwa has held several senior real estate positions in the country,
including President Reliance Land (1995-2005) and CEO of Lokhandwala
developers (1981-1994) one of the largest residential real estate developers in
India.

Mr. Pahwa is a Graduate from the Delhi University and holds a masters degree in
management from JBIMS Mumbai. He is fellow member of RICS.

SACHIN DEODHAR, Chief Financial Officer


Sachin is responsible for monitoring finance, accounts and compliance. He has over
17 years of experience in financial services in India, including operational
functionalities of mutual funds, venture capital funds, hedge funds, equity broking
houses and clearing exchanges.

Prior to joining INDIAREIT, Sachin was at Kotak India Realty Fund as Chief
Financial Officer, wherein he was primarily responsible for investors' relations,
audit, compliance and fund structuring. He has exposure to various functions
including treasury, loan syndication, assurance/audit, portfolio management, MIS,
budgeting, internal audits, consulting, due diligence and risk management. He is a
qualified Chartered Accountant.

He has joined INDIAREIT on 17th July 2007

PAWAN SAWHNEY, Partner - Investments


Pawan is responsible for leading new investments and monitoring existing
investments in South India. He has over 14 years of experience in the field of Real
Estate, Strategy Consulting, Technology and Infrastructure.

Prior to joining INDIAREIT in 2008, he worked with IBM, UK, based out of London
where he was involved in developing Business Strategies for the various European
and Middle East clients within the financial sector. Prior to his MBA, Pawan worked
for the Global Equities division of Deutsche Bank, Singapore. There he worked as a
Business and Technology analyst for Equity systems of the bank. During his MBA,
Pawan was a summer intern with Corporate Strategy Group of The World Bank,
Washington D.C. He is a B.Tech from IIT, Mumbai and an MBA from Oxford
University, UK.

He has joined INDIAREIT on 4th June 2008

AMIT DIWAN, Partner - Investments


Amit is responsible for leading new investments and monitoring existing

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INDIAREIT Fund Advisors Pvt. Ltd

investments in North India. He has over 10 years of experience in financial


services with the last 5 years being in real estate investments in Southeast Asia
and India.

Prior to joining INDIAREIT in 2010, Amit was a Director at Jones Lang LaSalle's
(JLL) Asia Pacific Capital Markets team. Prior to JLL, Amit had setup GE Real
Estate's Singapore office, and as head of investments, led transactions in excess of
US$ 250 million in Singapore, Thailand, Malaysia, and Philippines. Amit has also
worked for 5 years at Marakon Associates as a management consultant, and
advised CEOs & CFOs of MNCs in over 10 countries across Asia-Pacific. He holds an
MBA from Indian Institute of Management, Ahmedabad (IIMA), and a Bachelors
Degree in Economics from Shri Ram College of Commerce (SRCC).

He has joined INDIAREIT on 1st June 2010

3.2Who at IFAPL The back office operations are currently being monitored by the Chief Financial
is in charge of Officer Mr. Sachin Deodhar.
the back office,
name, Please refer above for details of CFO Mr.Sachin Deodhar
qualifications
and
experience?
3.3Indicate the The investment team at IFAPL has witnessed 4 exits. However, the team has been
turnover further strengthened with new members with significant real estate experience
(number of joining in Investment and Asset Management team.
people) that
has occurred in
your Property
teams as a
whole during
the past five
years
3.4Please include Exits were on account of personal reasons .
an explanation
for any unusual
turnover listed
above
3.5Are there any
Senior level positions as far as possible are filled with internal resources thereby
plans to
giving them growth opportunities while ensuring continuation in the policy,
change the
guidelines and philosophy of the fund.
team structure
or staffing
levels in the
near future? Is
it common for
people to
progress their
careers within
your
organization or
are the

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INDIAREIT Fund Advisors Pvt. Ltd

majority of
senior
positions
recruited
externally?

3.6Give details for


the preparation The INDIAREIT Funds and IFAPL endeavour to document all major activities
for unexpected which in turn ensures a smooth transition if necessitated by any changes in
incapacitated the core team
and retirement
of core Besides, IFAPL follows a flat organization structure and believes in
members maximizing interaction and awareness amidst its entire team to ensure that
operations are not dependent on any one individual

Focus on quality manpower and an effective second line of management is


also being nurtured to ensure perpetuity in business without excessive
dependence on any one member of the core team

3.7What is the IFAPL was incorporated in 2005, the minimum number of people in the
most and the organization over the last 3 years has been 15 and the maximum 27.
least number
of employees
in the last
three years?
3.8How does the
Presently, the team members have been identified on internal reference basis and
firm attract
through leading head hunters / HR consultants
new people?
As INDIAREIT envisions expanding its team, it has also hired services of specialist
consultants
3.9Please provide
The compensation for the key investment professionals comprises a competitive
a description of
salary and a share in the carry pool.
your firms
compensation IFAPL is entitled to a 40% share in the total carry due from the INDIAREIT Funds.
system for key A major portion thereof is reserved for the key team members of IFAPL
investment
management Please refer PPM for more details on carry structure
professionals &
carry split.

Section 4: Investment Team, Strategy & Research


4.1Please give Investment Committee of the Domestic Funds consist of
details of the following members:
investment
committee of 1. Ajay Piramal
the various
Ajay Piramal is an eminent business personality in the global
INDIAREIT
Funds. corporate world. His educational qualifications are B.Sc. (Hons.) from
Bombay University, Master in Management Studies from Jamnalal
Bajaj Institute of Management Studies and Advanced Management
Programme, Harvard.

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Ajay Piramal is the Chairman of Piramal Enterprisess Limited and


heading an industrial group of over Rs. 4,500 crores, having
diversified interests in pharmaceuticals, glass containers, etc. Within
the group the leading companies are Piramal Enterprises Limited
(largest pharmaceutical company in the domestic market), Allergan
India Private Limited (a joint venture), Gujarat Glass Private Limited
(packaging products for pharmaceutical and perfumery industries),
etc.

2. Khushru Jijina (See Profile above)

3. Niraj Bhukhanwala

Niraj Bhukhanwala is a MBA from INSEAD, France. He has done his


Bachelors in Electrical Engineering from The Indian Institute of
Technology, Mumbai and also done his Master in Electrical
Engineering from the University of Maryland, College Park.

On the professional front he was a part of the team that set up


Intel's
venture capital operations in India. There he focused on early stage
technology investments. Prior to Intel, he has worked with Mckinsey
and Company in London focusing on pan European strategies in the
telecom and Enterprises sector.

At present, he is Director of Bhukhanwala Holdings Private Limited It


is a closely held boutique investment company and the primary
investment vehicle for the Bhukhanwala Group, one of the pre-
eminent Indian business groups. It is a registered NBFC with the
Reserve Bank of India with investments across various asset classes
with a focus on private equity investments.

4. R. A. Shah, Independent Member

A solicitor and senior partner at M/s Crawford Bayley& Co., R.A.


Shah specialises in abroad spectrum of Corporate Law in general
with a special focus on Foreign Investments, Joint Ventures,
Technology and License Agreements, Intellectual Property Rights,
Mergers & Acquisitions, Industrial Licensing, Anti- Trust and
Competition Laws.

Apart from being a Chairman of leading publicly traded


companies in India, R.A. Shah is also a Member of the Managing

16
INDIAREIT Fund Advisors Pvt. Ltd

Committee of Bombay Chamber of Commerce, Indo German


Chamber of Commerce and president of Society of Indian Law
Firms (Western Region).

5. Shitin Desai, Independent member

Shitin Desai is Executive Vice Chairman of DSP Merrill Lynch, and


is one of its founding Directors. He has been advising various
large corporate organizations in formulating, structuring and
implementing financial packages for various projects across
sectors and is recognized as one of the leading investment
bankers in the country today.

He was a member of the Committee on Take overs appointed by


SEBI and was a Member of: RBI Capital Markets Committee,
Advisory Group for Securities Market of RBI and Insider Trading
Committee of SEBI. He was also a Member on the Executive
Committee (Futures & Options Segment) of National Stock
Exchange of India.

6. Ashish Dalal, Independent member

Ashish Dalal has till recently been a partner of Dalal & Shah,
Chartered Accountants and has also been a partner of Price
Waterhouse & Co. He has been actively practicing in various
fields relating to Mergers, Acquisitions, Strategic Alliances,
Business Valuations, Specialised Investigations, Due Diligences,
Foreign Collaborations & Joint Ventures and has acted as a
domestic counsel for cross border transactions.

He has also held directorships in Wyeth Limited, Akzo Nobel


Chemicals (India) Ltd., ICICI Investment Management Co. Ltd.,
Financial Technologies (India) Ltd. and Multi Commodity
Exchange of India Ltd. Additionally, he is a non-executive
independent director and the chairman of the audit committee of
MPS Limited.

7. Tara Subrahmanium

Tara Subramaniam is a Director with the Sun Group. Her current


assignment is with a venture between the Sun Group and Forest
City called Sun Forest City. Forest City is the largest listed real

17
INDIAREIT Fund Advisors Pvt. Ltd

estate developer in the US who have tied up with Sun Group to


develop real estate spaces across various asset classes in India.
Earlier, Tara was a part of HDFC Limited as Deputy General
Manager, Commercial Real Estate where she was a part of a
team which was formulating funding and underwriting strategies.
She was also responsible for managing client relationships
ensuring compliances on the legal front such as title due
diligence, documentation, regulatory filings, etc. In this role, she
was also associated with managing close association with various
real estate participants, which primarily involved developers and
various other real estate bodies.

Tara is a Bachelor of General Law from Government Law College,


Mumbai.

4.2How long Projects are recommended to the Investment Committee after a multi
would the level screening at the Investment Advisor level with inputs from
investment independent third party consultants who may be hired for due diligence
advisory on land titles etc. The total process of conducting due diligence post
committee identification of a project takes about 4 8 weeks.
typically take
on due Thereafter, the project is presented to the investment committee, which
diligence of accepts or declines an investment proposition. Post, acceptance by the
each investment committee, the project can take anywhere between 4 6
project? weeks for the conclusion of the deal.

4.3Please give Fund V will attempt to achieve its objectives by investing in equity,
an outline of equity related, and debt instruments of unlisted real estate
your firms companies across various cities in India and across various segments
investment
of real estate. Fund Vs investment will be in construction and
guidelines,
restrictions development projects which shall be identified on the basis of in-
and its depth research and analysis of the demographic profile,
investment infrastructure developments, and the growth drivers emerging in
philosophy various cities. In addition, Fund V's investments will be in
accordance with generally accepted CSR guidelines.

Fund V's investment philosophy will be to focus on:

Focus Segment

Geographic concentration driven by robust and established


demand
o Metros and Tier-I cities including but not limiting to
Bangalore, Pune and Mumbai and also opportunistic deals in
Tier 2 cities

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INDIAREIT Fund Advisors Pvt. Ltd

Focus on Residential - Self liquidating asset with minimal exit


risk; seek to reduce exit risk through pre sales which results in
negative working capital for construction and thus minimising
need for leverage
Mixed use projects Higher Residential componentas it helps
generating cash flows for commercial construction thereby
reducing requirement of debt/leverage

Strong Partner selection and control


Partner with developer with strong execution track record
o Align economic interest with developer
o Milestone based / delivery driven staggered payments;
focus on developing long term relationship
Strong Governance rights
o Right for key decision making and appointment of key
personnel in relation to the project
o Adequate Financial and project controls and right to
appoint third auditors

Downside Protection

Investment primarily for execution capital with preferred return


Entry at land cost at which end user affordability metric is met
Non-speculative underwriting with no zoning, title or aggregation
risk
o Not considering ancillary revenue opportunities such as
floor rise, parking, deposits and amenity income (club
house fees, etc)
Priority distributions
o Prioritised return of capital; Focus on IRRs rather than
Money Multiple

Investment Structuring

Investments by way of Equity, Equity related, Debt and related


instruments
Investments with pre determined/ high fixed returns with
adequate security
Structured investments with downside protection by way of a
preferred IRR and an equity upside
Pure Equity Investments in case of investments where entry
price is very attractive and to ensure upsides
Well defined exit mechanism with definite time lines
o

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INDIAREIT Fund Advisors Pvt. Ltd

Concentration Limits

Fund V will not invest more than 20% of aggregate Capital


Commitments at the time of the investment in any one Investee
Company. Where an investment is proposed to exceed such threshold,
approval of Super-Majority of the Investment Committee (as defined
herein below)will be required.

For Cities other than Mumbai, the Investment Advisor will limit the non-
residential elements to 20% (i.e. the projects would be at least 80%
residential).

For Mumbai, the Investment Advisor will retain the flexibility to go up to


40% of the non-residential projects on account of the market being less
oversupplied in commercial space and also that this would give the
leeway to consider the 'hospitality development' sector where higher
floor space index is available. In these particular cases, the Investment
Advisor will restrict the hospitality development to the construction of
serviced apartments that would be targeted as far as feasible to be sold
to residential buyers.

Fund V will have the following internal prudential norms in terms of


various parameters:
Serial Particulars Maximum % of
number Total Portfolio
Value
I. Single project 20
II. Overall exposure in a single 40
group
III. Single City (Metros) 70
IV. Non Metro Cities 40
V. Single segment Residential
Minimum 70
Commercial/Others
30
VI. Development Focused 100
Investments
4.4As for
Some of the external professionals and consultants retained by IFAPL
reliance on
and the INDIAREIT Funds for various aspects of its business processes is
professionals
as under:
and
consultants, Audit and Accounts - Grant Thornton, Mumbai
who will be
Financial and Legal - Nishith Desai Associates & Kanga & Company
involved in
each task? Project Valuation - JLL/CBRE/ DTZ /Knight Frank/Cushman Weikfield

20
INDIAREIT Fund Advisors Pvt. Ltd

Could you External Marketing Citi Bank, ICICI Bank, HDFC Bank, ABN Amro
provide Bank, Standard Chartered
names of
external
professionals Fund Administration - IL&FS Trust Company Ltd, as Trustees
and their
Fund Accounting Confisys Solutions for Fund Accounting
specific
tasks? Backoffice Service Provider - CAMS for collection and backoffice
support
4.5What are the Due Diligence may be broadly sub-divided into Commercial, Technical
items for due and Legal due diligence. Commercial due diligence establishes demand,
diligence rate and off-take potential for the property. Technical due diligence
validates, regulations, plans, architectural nuances etc. Legal due
diligence establishes the title of the property and feasibility of sanctions
and approvals. Further, the team also conducts due diligence on the
delivery capability of the developer including his financial solvency. In
addition, the team also engages the services of local municipal experts
in various regions to understand the sanctions feasibility for any given
project.
4.6Describe in Detailed due-diligence of a developer / property is undertaken at various
detail the levels of analysing and recommending the investment opportunity.
firms due Some of the parameters considered include:
diligence Verifying promoters credentials and track record. This is done
process. through actual site visits to developers existing sites; third-party
Provide referrals and analysing published data
examples of Accessibility and market potential study of the site
reports and Primary market survey of competing developments thus
working understanding the sectoral opportunities
papers, Due diligence on our development partners by a third party
where entity on a case by case basis
available Analysis of key past trends to help ascertain the future scenario
Status of various approvals required for the development at a
site and availability of the same with the developer
Land title scrutiny through employing services of legal
consultants
Confirmation of FSI details assumed
Compliance with guidelines on environmental protection, social
and rehabilitation issues, if any
Verifying the project cost and financials indicated by the
developer. This may be done by commissioning independent
valuation report as well as a geographical analysis of a given site,
by relevant consultants
Verifying key assumptions made by the promoter
Detailed financial analysis with sensitivity analysis
Estimation of project IRR and equity IRR under varying scenarios
Possible exit strategies, clearly indicating timing and key
assumptions on which it relies
Assessment of potential risks and proposed mitigations
Proposed optimal deal structure including taxation
Detailed evaluation and understanding of proposed terms on
offer

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INDIAREIT Fund Advisors Pvt. Ltd

For areas not covered under initial review, a further detailed analysis is
carried out during the Due-Diligence stage of the project evaluation.
The analysis is then presented to the relevant Investment Committee
for its approval.
A copy of the Investment Committee Note and Presentation for a
typical deal can be shared with the investors during their due diligence

4.7Will any IFAPL believes that investments made by the INDIAREIT Funds are
expected backed by extensive prudential norms and are structured to provide
price downward protection. We build in conservative assumptions in all our
correction projects with regard to the business plans, costs and revenues.
impact entry
and exit Additionally INDIAREIT has the right to extend the exit period by 2
valuations periods of one year each in case market conditions are not conducive for
for the exits.
investments
advised by Hence, INDAIRET Funds should normally not foresee significant change in
IFAPL? their
targeted net return to the investors.

Section 5: Fund Information / Investment Objective for INDIAREIT Fund Scheme V

5.1What is the 1. Investment objective of Fund V


investment
objective of The primary objective of Fund V is to invest predominantly in equity
the fund?
and equity related and debt instruments of companies engaged in
Please
include: real estate development with a focus on residential development
and real estate related activities as well as property management,
-Target market infrastructure and allied sectors (including but not limited to
by sector warehousing, port related logistics, special economic zones and
(including any industrial parks) in India with an objective of generating long-term
limits on
capital appreciation and rental income so as to deliver regular
individual
sectors split by distributions to the Investors with a competitive rate of return on
%) their investment.
-Target IRR
excluding
gearing Fund V shall seek returns by way of dividends and interest income
- from Investee Companies and capital gains on exiting from Investee
Target/maximu Companies. The targeted IRR expected by the Fund V is in excess of
m gearing
24%.
(debt/GAV) on
both an
individual 2. Investment Opportunity
property basis
and total fund Indian residential real estate market remains continues to remain
basis
stable, although the developers are stressed for liquidity due to
-Length of
investment limited access to capital. Hence, the current environment presents a
period unique opportunity of earning higher equity return with

22
INDIAREIT Fund Advisors Pvt. Ltd

-Estimated proportionately lower risk.


length of time
before the fund 1. Residential Market Resilience in Tier 1 Cities
will be invested
(excluding
follow-on Residential market has been relatively stable given supply
investments) demand imbalance and strong desire for home ownership
-Expected Only 120,000 new middle class units are being built
investment annually; well short of demand (7 million)
holding period
-Expected number
Attractive investment environment for residential real
portfolio
investments, estate expected to continue
including any Strong long term fundamentals
minimum and Urbanization leading to population migration to top 6
maximum cities

Back to Basics after 2005-2008 market anomaly


Renewed focus on debt reduction and land bank
monetization

2. Demand for capital by Developers


All time high leverage levels
Developers searching for alternate sources of funding
Realize maximum potential by capitalising on this
opportunity

3. Funding getting tighter, costlier and selective

Strict RBI Regulations


High interest rate regime
Volatile capital markets with no interest in real estate
FDI in real estate / construction down drastically
Global slowdown

4. Presents an arbitrage opportunity for Fund V to earn high


equity like return with proportionately lower risk

3. Investment Strategy

Fund V will attempt to achieve its objectives by investing in equity,


equity related, and debt instruments of unlisted real estate
companies across various cities in India and across various
segments of real estate. Fund Vs investment will be in construction
and development projects which shall be identified on the basis of

23
INDIAREIT Fund Advisors Pvt. Ltd

in-depth research and analysis of the demographic profile,


infrastructure developments, and the growth drivers emerging in
various cities. In addition, Fund V's investments will be in
accordance with generally accepted CSR guidelines.

Fund V's investment philosophy will be to focus on:

Focus Segment

Geographic concentration driven by robust and established


demand
o Metros and Tier-I cities including but not limiting to
Bangalore, Pune and Mumbai and also opportunistic deals in
Tier 2 cities
Focus on Residential - Self liquidating asset with minimal exit
risk; seek to reduce exit risk through pre sales which results in
negative working capital for construction and thus minimising
need for leverage
Mixed use projects Higher Residential component as it helps
generating cash flows for commercial construction thereby
reducing requirement of debt/leverage

Strong Partner selection and control


Partner with developer with strong execution track record
o Align economic interest with developer
o Milestone based / delivery driven staggered payments;
focus on developing long term relationship
Strong Governance rights
o Right for key decision making and appointment of key
personnel in relation to the project
o Adequate Financial and project controls and right to
appoint third auditors

Downside Protection

Investment primarily for execution capital with preferred return


Entry at land cost at which end user affordability metric is met
Non-speculative underwriting with no zoning, title or aggregation
risk
o Not considering ancillary revenue opportunities such as
floor rise, parking, deposits and amenity income (club
house fees, etc)
Priority distributions
o Prioritised return of capital; Focus on IRRs rather than
Money Multiple

24
INDIAREIT Fund Advisors Pvt. Ltd

Investment Structuring

Investments by way of Equity, Equity related, Debt and related


instruments
Investments with pre determined/ high fixed returns with
adequate security
Structured investments with downside protection by way of a
preferred IRR and an equity upside
Pure Equity Investments in case of investments where entry
price is very attractive and to ensure upsides
Well defined exit mechanism with definite time lines

Concentration Limits

Fund V will not invest more than 20% of aggregate Capital


Commitments at the time of the investment in any one Investee
Company. Where an investment is proposed to exceed such threshold,
approval of Super-Majority of the Investment Committee (as defined
herein below)will be required.

For Cities other than Mumbai, the Investment Advisor will limit the non-
residential elements to 20% (i.e. the projects would be at least 80%
residential).

For Mumbai, the Investment Advisor will retain the flexibility to go up to


40% of the non-residential projects on account of the market being less
oversupplied in commercial space and also that this would give the
leeway to consider the 'hospitality development' sector where higher
floor space index is available. In these particular cases, the Investment
Advisor will restrict the hospitality development to the construction of
serviced apartments that would be targeted as far as feasible to be sold
to residential buyers.

Fund V will have the following internal prudential norms in terms of


various parameters:

Serial Particulars Maximum % of


number Total Portfolio
Value
I. Single project 20
II. Overall exposure in a single 40

25
INDIAREIT Fund Advisors Pvt. Ltd

group
III. Single City (Metros) 70
IV. Non Metro Cities 40
V. Single segment Residential
Minimum 70
Commercial/Others
30
VI. Development Focused 100
Investments

To build in further downward protection and ensure value preservation,


Investment Advisor will also consider following while investing:

Ensure that developer contributes capital to project to ensure


cost, quality and time bound delivery (skin in the game)
Strict veto rights at SPV level
Third party execution at Funds discretion
Joint bank account signatory rights across development partners
No sales price escalation or fringe income taken into account
entire project modelled on conservative and static basis
Take over rights if project not delivered
Right to appoint Project Management Consultant (PMC)
Local city presence through combination of Investment / Asset
level team

Fund V will approach a partnering philosophy and will provide


strategic inputs to the Investee Companies to help them achieve
their own objectives in a professional and transparent manner and
to build value for their projects.

Fund V will invest only in private limited structure and other


structure as approved by VCF Regulations.It shall be guided by the
following sectoral and regional exposure limits, which may be
reviewed periodically based on market conditions.

Target IRR
Gross IRR of 24% plus

Investment Period
2+1 years from interim close

Expected Investment Holding Period


4 - 5 years

Expected number of investments


6-10 depending upon the size of investment opportunity

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INDIAREIT Fund Advisors Pvt. Ltd

5.2What is the Please refer to the Offering Documents of the Fund for details on units.
nature of
instrument /
unit allotted
to Investors
5.3Who can Resident Indian investors (Institutions, Corporates and HNI)
invest in
Domestic
Fund V?
5.4Is there any There is a structural lock in for investment, since return of capital is
lock-in period limited to actual exits. Also the fund does not buyback units and also
for units are also not listed in the market. So till such time project dont
investment? mature / exit and cash flow is not received from the project, investment
Is there a cannot be redeemed.
provision for
early exit? Investor has an option of third party sale of fund units.

Disinvested amount has to be returned to the customers and cannot be


reinvested.

Please refer to PPM for further details on lock-in.


5.5Will the Fund None of the INDIAREIT Funds declare an NAV. However, each Fund
declare an issues a quarterly Newsletter to its investors that detail the various
NAV? developments at the Fund level. As provided in each Funds constitutive
documents, an independent valuation by a reputed international
property consultant is commissioned annually (Half yearly on a best
case basis) and a summary of the same is shared with the investors.

All investments are shown at cost till the project is exited.

5.6What are the Following reports are sent to the investors:


reporting Quarterly newsletters providing details on status of various
procedures projects, summary on markets and price movements in invested
to the locations. Developments in the real estate sector and analysis on
investors? its impact on the market and various invested projects
Annual audited financial statements
Annual third party valuation reports by International Property
Consultants
Annual Income Statement
5.7Are audit Yes, annual audit reports for Domestic Funds can be made available to
reports potential investors on request.
available to
the
investors?
Provide
sample

5.8 Can you IFAPL has a robust Investors Relations cell in place, which answers any
answer investor query quickly.
sudden
inquiries by Since most of the investors are being referred to us through leading
investors? banks, the investors queries are primarily answered directly by

27
INDIAREIT Fund Advisors Pvt. Ltd

How often relationship/investment advisors who in turn are free to approach us


do you for any queries.
organize a
team to
have a face-
to-face
explanation
for
investors?
5.9 What if the Investor with a minimum of 6 years holding capacity should invest as
investor there are no mid way exit options. There is no buy back option
wants to available.
exit before
the
investment
period of
the Fund?
Is there a
buy back
option?
5.10 What If the investor does not honour a draw down notice, the fund can either
happens if levy penalty for the delay in payments and in case of non payment,
an investor forfeit the contribution already made by the investor.
cannot
honour Please refer to the PPM for further details
subsequent
requests for
drawdown?
5.11 At what Units issued on par value of INR 100,000.
price will
Please refer to the PPM for further details.
the shares
be issued
after the
Initial
Closing?

5.12 In case I IFAPL has an Investor Relations team that is dedicated to directly
have any answer investor queries.
concern or E-mail: investors@piramal.com
grievance Phone: +91-22-6151 3440
whom can I
approach?

5.13 What is the The initial closing of Fund V has been held upon receiving capital
concept of commitment of INR 50 crores. The Investment Advisor will hold
Interim Interim Closing on receiving Capital Commitments equal to or more
Closing?
than INR 300 crores. However, the Investment Advisor may, at its sole
discretion declare Interim Closing upon receiving Capital Commitments
for an amount lower than INR 300 crores.
5.14 What are The upcoming deal pipeline can be shared on request.
some of the

28
INDIAREIT Fund Advisors Pvt. Ltd

indicative
upcoming
projects
that IFAPL
is
evaluating?

5.15 Do you also No.


expect to
advise
Domestic
Fund V to
invest in
other
developing
companies
and
portfolio of
other
funds?

5.16 Can the NA


proposed
fund invest
in publicly
listed
companies?
Indicate
what the
limitations
are, and
what your
policy is
regarding
hostile
take-overs?
5.17 Please INDIAREIT funds have established best practices and good governance
detail the systems in its project evaluation and monitoring processes. The
investment investment process is summarized below:
process for
INDIAREIT
Funds?

29
INDIAREIT Fund Advisors Pvt. Ltd

i. Sourcing / Initial vetting of deals: The Investment Advisor will identify potential deals
though extensive research, tender invitations, tie-ups with reputed real estate
consulting firms, merchant bankers, investment advisors and through relationships. The
Domestic Fund V will lay down sound principles and processes for identifying
builders/developers of repute and track record. Due weight will be given to the
professional approach of the developer. The Investee Companies will be selected based
on a combination of management teams, professional skills, track record and growth
potential, existence of a sound business plan, and availability of sound exit options

ii. Filtration: The Investment Advisor will vet the deal, to filter out those that do not match
the Fund investment criteria. Here the focus will be on the Mumbai Market with early
stage entry, well-defined exits, low cash out to developer, structured to provide
downside protection

iii. Preliminary evaluation: Emphasis here will be on in-depth research both at macro and
micro levels. For example the macro level analysis for a mixed-use development would
cover the sectoral trends, demographic patterns, economic growth, social infrastructure
such as educational institutes and infrastructure projects like connectivity, water and
power supply proposed for the city. This would enable the fund to identify potential
green field projects with high potential of capital appreciation. At the micro level,
emphasis would be on the project location, capabilities of the developer, existence of
rights and title of property, etc.

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INDIAREIT Fund Advisors Pvt. Ltd

iv. Detailed evaluation, due diligence and structuring of proposal: Emphasis here will be on
continued in-depth research and due diligence to minimize the risk. The financial and
legal due diligence would include the entire business model, the organization, the legal
framework, and regulatory compliance. Financial engineering to optimize returns would
be conducted and risk mitigation measures put in place. This would result in
maximizing the returns for the contributors by way of capital appreciation. Subsequent
to detailed evaluation and due diligence Investment Advisor will prepare the proposed
final terms of investment.

v. Investment Committee approval & execution of investment agreements: The structured


project together with the terms of investment including investment protection rights
and exit options will be put up to the Investment Committee for consideration.
Investment Committee approves the investment terms specifying the terms relating to
pre-commitment and pre-disbursement conditions. Upon satisfactory compliance of
such conditions the investment agreements will be drafted and vetted by the Funds
legal counsel. Such agreements will contain agreed contractual rights and obligations
of each of the parties including board seats, customary veto rights, warranties,
representations, anti-dilution and exit provisions for the Fund. Depending on the
investment size, the Domestic Fund V may also obtain a say in the important decisions
of the Investee Companies through participation/representation in management. Upon
finalization of investment agreements Domestic Fund V and the Investee Company shall
execute the same

vi. Post investment monitoring: Investment monitoring will be done through participation
in key project decisions and/or monitoring the progress of the project through periodic
project updates and company visits. Domestic Fund V can provide value addition to the
project by helping in identifying the proper mix of consultants such as master planners,
design architects, constructors etc.
5.18 Do INDIAREIT As of now, all investments under the INDIAREIT Funds have been
Funds invest in solo investments. However, the INDIAREIT Funds are open to
each project as a participate with other funds/ investors.
sole investor, or do
you co invest with
other funds?
5.19 What are the Pursuant to preliminary analysis of the investment proposal by
checks and investment advisor, a detailed evaluation, due diligence and
balances that the structuring of the proposal is done. Here emphasis will be on
Fund adheres to continued in-depth research and due diligence to minimize the
prior to making risk.
investment The financial and legal due diligence would include the
decision? entire business model, the organization, the legal
framework, and regulatory compliance
Financial engineering to optimize returns would be
conducted and risk mitigation measures put in place with a
view to maximizing the returns for the contributors by way
of capital appreciation
Developer balance sheet is analysed to determine financial
strength of the developer to fulfil its commitments

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INDIAREIT Fund Advisors Pvt. Ltd

Secure adequate collateral where necessary


Backend upside to the developer
Escrow account for project cash flow
Joint signatories on bank accounts
Equal representation on the board with voting rights and
stringent reserved matters

Investments by the Fund shall be approved post internal


deliberations of the Investment Committee which is constituted of
independent advisors, promoter representatives who have an
understanding of the legalities and structuring issues related to
real estate transactions. Investments by the Investment
Committee of the Fund shall be approved post internal
deliberations of the Committee which is constituted of promoter
representatives and independent advisors who have an
understanding of the legalities and structuring issues related to
real estate transactions.

5.20 How does IFAPL IFAPL evaluates developers on multiple criteria before taking an
select developers? investment decision. Some of these include:
Experience in real estate development with the developer
in the particular geography where the investment is
proposed
Total built up area developed in the past and the proportion
of development in the particular segment (residential,
commercial, etc) with the developer
Track record in terms of timely delivery, quality, dealings
with various stakeholders like land owners, buyers,
financial institutions ascertained through reference checks
and third party due diligence through international property
consultants where deemed necessary
Organizational structure, books of accounts, internal MIS
for the past transactions and manpower profile of the
developer
5.21 Elaborate on Some of the basic details that developers are expected to
guidelines/require share/disclose include:
ments in terms of
disclosures Title and legal status of the project
expected from Various approvals required and current status of the same
developers to carry on desired development
Various assumptions undertaken
Basis of financial projections
Detailed architectural/structural plans
Details on competing projects in the site vicinity
Any market data to support demand/sales projections
Details of various business partners they plan to engage for
project
Corporate structure/existing shareholders and their
holdings in the company
Last 3 years financial details, balance sheets etc. for the
company

32
INDIAREIT Fund Advisors Pvt. Ltd

This is just an indicative list and more details may be required to


be disclosed, depending on the project.

Developers are also encouraged to partner with consultants


recommended by IFAPL to carry independent valuations and due-
diligence.

EXIT STRATEGIES

5.22 Please provide Exit strategies in respect of investments made by Fund V shall
details of exit include but not be limited to:
strategies /
(a) Direct sale of product to end customers, especially for
procedures
including: residential project
Details of (b) Sale to existing REITs, funds, funds of funds or other similar
preferred exit entities;
scenarios.
(c) Asset securitisation either onshore or offshore; or
The Limited
Partners Role (d) En-bloc sale to institutional investors.
in the decision (e) Potential listing in case of Enterprises level investments
making
(f) Sale of stake to development partner or third party buyer
process. For
example, the
degree of
approval /
advice sought
from Limited
Partners on
exit strategies
5.23 As to the INDIAREIT Funds expect to maintain a portfolio of primarily
properties residential properties. INDIAREIT may also choose to invest in
being commercial properties if the opportunity is deemed to be
developed, are favourable.
they going to
be sold to third The residential properties would be sold to third party buyers to
parties after generate consistent cash flow.
completion or
will they be The commercial properties may be developed, leased out and sold
rented out? to earn an optimal mix of lease rentals and capital gains. The Funds
Are they going will seek buyers for the entire buildings/ properties depending upon
to be tax incidence and the regulatory framework including opening up of
sold/rented REITS/ listing potential for the investee company holding such
out by the property, etc.
building (as
opposed to by Overall, the exits will be done on case-to-case basis, taking into
the floor, room, account the tenure of the fund and the nature of the real estate
etc.), or is it market.
case by case?
5.24 How will you Sales will be undertaken by the developer right through the project
assess the execution phase. The sale price will depend on prevailing market
value of conditions in the area that the project is taking place.
property when

33
INDIAREIT Fund Advisors Pvt. Ltd

you sell it?


Could you
provide the
details with an
example? In
order to ensure
adequacy of
assessment,
will there be an
appraisal
report by a
third party?
5.25 What is the The Funds are required to conduct an annual valuation exercise, the
property results of which are shared with investors. This is typically done by
valuation reputable companies including C Jones Lang LaSalle, CBRE, Colliers
process while International, Knight Frank, Cushman & Wakefield, , DTZ
project is in International etc.
progress? Are
there are any
third party
agencies
appointed to
review the
valuations?
5.26 Who will carry The responsibility of managing exits will rest with the Funds, under
out actual advice from IFAPL and approval of the relevant IC. However, IFAPL
tasks of exit and the Funds will retain services of leading tax and legal experts to
strategy? ensure tax optimal and seamless exit from its investee companies.

5.27 In case you This could be subject to fund tenure. IFAPL expects most of the
rent out Fund projects to have a development/ construction horizon of 4-5
completed years. Where the properties are rented out, IFAPL will seek to
properties, maintain a rent out period to ensure exits are within the tenure of
what is your the Fund.
stance on the
holding period
(rent-out
period)? How
long do you
expect to hold
properties for
renting, from
the time of
project
construction
start until the
Fund sells it
out to a third
party?
5.28 Is there any It is not envisaged that Fund V will go public
possibility that
Fund V shall go

34
INDIAREIT Fund Advisors Pvt. Ltd

public?
5.29 Please specify As a policy, IFAPL will advise on the launch of fresh schemes under
controls in the Domestic or Offshore umbrella only once the existing Domestic
place with or Offshore Fund has been committed at least 70% for investment.
regards to: Further, there are co-investments by the existing Domestic and
- Any conflict Offshore funds as described in the co-investment plan.
with other
funds under Currently the Offshore fund is fully deployed and hence co
management investment is not foreseen until a new Offshore fund is raised.
- Use of
independent The portfolio investments are made as per the guidelines for
valuers to maximum investments as described in Section 2 and 4. The exit
secure stock strategies are the same for different funds, thus, there should be no
conflict of interest within different funds.

5.30 Describe Predevelopment Risk Mitigation


IFAPLs measures
proposed risk
management " Process driven project
philosophy and " Non-availability of land evaluation
methodology and/or clear title
" Detailed due diligence before
" Sanction feasibility investing
Development Risk

Poor construction quality Establish guidelines for


investees for amendments to
Cost and time overruns and controlling designs, costs
Delays in local approvals and quality
In-depth analysis of approval
process
Milestone-driven investments

Exit Risk

" Tracking of market


conditions
" Adverse demand situation
" De-risking through pre-
" Regulatory Risk sales
" Periodic portfolio review
and evaluation

5.31 How does Downside risk is protected by one or more of the following
IFAPL address mechanisms
downside
Work on a preferred return of capital, with a minimum-
performance?
return benchmark, with the developer. In such
arrangements, the developer gets rewarded through higher
share of profits post reaching benchmark deliverables
Entry at land cost stage only with no premium over the land

35
INDIAREIT Fund Advisors Pvt. Ltd

cost being paid to the developer. In such arrangements, the


INDIAREIT Funds may take a higher percentage of cost
sharing even-though the profit share is on an equitable
basis. But, such capital is treated as preferred capital and
returned to the INDIAREIT Funds prior to profit share trigger
De-risking through establishing pre-sales and/or lease
options during construction phase itself thus ensuring
minimal outflow towards construction while also establishing
a base level selling price for the properties being developed
under any given project
Staggered payments to the developer linked at actual
deliverables like construction schedules, concluded sales, etc
INDIAREIT Funds also appoint their own nominees on the
Board of Directors of the project, with veto power as well as
strict reserved matters
INDIAREIT Funds also ensure their interests in the investee
companies by building provisions to take over control of the
company on non-performance both on cost as well as time
criterion
All project cash flows are escrowed to ensure proper
disbursal and collection of funds at the SPV level
IFAPL expects to continue with the same measures for investments
by the Fund V.
5.32 Explain Since the INDIAREIT Funds enter into the project at land
procedures and cost stage, which is an inherent asset and is unaffected by
preparation for market movements owing to its pertinent rarity and over-
catastrophic demand, IFAPL believes that such investments are well-
real estate guarded against catastrophic real estate market conditions
market which would largely effect the development costs and final
conditions sales price of the developed product but will not
significantly influence the land cost of a project

Effective structuring to protect investors from the volatile


market conditions

Detailed sensitivity analysis considering various market


scenarios and minimal rate-of-return clause in the
agreement, provide sufficient cushion and buffer before
making any investments.

Early de-risking by means of pre-sales in residential projects.

Higher share of residential projects that ensures continuous


cash flow further reduce the project risk in catastrophic
conditions

Conservative assumptions on business plan

5.33 Discuss the NA

36
INDIAREIT Fund Advisors Pvt. Ltd

kinds of
problems that
have arisen in
properties
realized or
valued below
cost. State how
these problems
were solved.
5.34 In case a The team at IFAPL is confident that it will be able to advise on or
developer fails manage the take over any incomplete project and execute it
to complete a smoothly given the involvement of the team in the development of
project and the the project at each stage, including appointment of third party civil
INDIAREIT contractors and other third party service providers.
Funds take it
over, how With Mr Khushru Jijina at the helm, supported by a strong asset
smoothly will management team, we have competence within the team to
the Funds be complete a project should the developer fail to do so.
able to take
over and
complete the
Project?
5.35 Which deals INDIAREIT Funds have successfully completed four exits in its
from the earlier Domestic Fund Scheme I, III & Offshore Fund:
funds proved Maiden investment in residential project (Signature Island)
successful and exited in Sept. 08 with 2.22x net money multiple
which deals Exit from commercial project (Neptune Evolution Kurla) in
proved Nov10, translating into 2.97x net money multiple.
unsuccessful? Partial exits done from Bangalore Retreat, Ariisto Sapphire,
Samira, Alpha City, Ariisto TDR

5.36 Will there be Depending on the size of the fund, each of the INDIAREIT Funds
an opportunity might have one or more cornerstone investor(s) that will have
for the clients contributed to a sizable portion of the total fund, and is in a position
to express to add value to the fund. Such a cornerstone investor may have a
their seat on the Investment Committee as well as a Board seat and will
investment accordingly get an opportunity to express his views on the
views (what investment opportunities available to the Fund.
are the criteria
for an investor
to be a member
of an advisory
committee?)

Cash Flows

5.37 Within how 21 working days


many days
after receiving
the Drawdown
notice, the
investor needs

37
INDIAREIT Fund Advisors Pvt. Ltd

to remit the
money?
5.38 How is the The Fund will endeavour to realize cash proceeds from all its
Residual Value investments within the term of the Fund. IFAPL believes that the
intended to be average holding period of investments advised by it will be 4-5
allocated at the years.
end of the
winding-up of The Fund may only make in-specie distributions if it is unable to
Fund V? dispose of its investments within the term of the Fund.

5.39 What is the The Fund shall not make reinvestments of Distribution
policy Proceeds.
regarding re-
investment of
investment
proceeds?
5.40 Describe the
2.0%, 1.75% and 1.5% p.a. for Class A, B & C units respectively
management
fee structure of
Fund V
5.41 What are the The Funds initial expenses, including setting up costs, legal fees,
expenses that incorporation and registration expenses and fees, placement and
shall be borne distribution fees and commissions to be paid to intermediaries,
by Fund V? (Initial Expenses) shall be borne by the Fund, and shall not
exceed 2% of the aggregate Capital Commitments of the Company.
The Investment Advisor shall bear any Initial Expenses that exceed
2% of the aggregate Capital Commitments of the Company

The annual Fund Expenses to be borne by the Fund shall include the
following:
All operating expenses of the Company and the Alternative
Investment Vehicles, if any
Management fees
Expenses payable to all service providers, including,
Administrators, auditors and lawyers
Incidental expenses including expenses relating to execution
of any agreements, for purposes other than consummation
of the transactions
Expenses incurred by the Company for collection of the
Capital Commitments;
Placement/distribution fees/commissions in connection with
sale of Shares of the Company
Legal and statutory expenses
Travel expenses of directors of the Company
Fees for seeking professional advice
Taxes imposed on the Company and the Investments
Banking charges
Costs of preparing and circulating financial and tax reports to
shareholders; and
Insurance premiums

In addition to the above, the Board of Directors shall approve such

38
INDIAREIT Fund Advisors Pvt. Ltd

Fund Expenses (including any other extra-ordinary and non-


recurring expenses) in any given fiscal year, as it deems fit.

5.42 Explain the Hurdle is a milestone rate of return. The Carry-ratio of profits of
terms Carry 82.5:17.5 ( 85:15 for commitment INR 1 crore to INR <10 crores
Ratio of Profits and 87.5:12.5 for commitment more than INR 10 crores ) between
and Hurdle? the Investors and the Fund Advisor is shared on the entire corpus
only after achieving the minimum preferred rate of 12% p a in the
case of Domestic Fund V. After the investors get the entire principal
and a minimum return at the preferred rate of 12% back, the
Investment Advisor becomes eligible to share the profits.

While computing distribution of profits, the Investment Advisor has


the right to catch up with the return already given to the investors
(in terms of the 12% preferred rate given) such that the entire
profits continue to be shared in the ratio of 82.5:17.5 (subject to
scheme).

Subsequent profits are divided equitably in the ratio of 82.5:17.5


between the investors and the Investment Advisor.

5.43 What is the The Fund has no re-investment policy and the proceeds will be
policy for distributed amongst investors on pro-rata basis.
treatment of
profits arising
out of the
projects? Will
these profits be
ploughed back
in the fund or
will be
distributed
upfront to the
shareholders/
investors?

Section 6: Individual Investee Projects

6.1You have set Segments are categorized as under:


limits on the
amount to invest (a) Commercial
in a single
(b) Residential
segment. How
do you (c) Mixed Use
categorize (d) Retailing
segments? (e) Hospitality Industry and Service Apartments
(f) IT and IT Enabled Services / Biotech Parks
(g) Special Economic Zones
(h) Enterprise Level Investment

39
INDIAREIT Fund Advisors Pvt. Ltd

6.2What is the basic Each investee company is in the form of a special purpose vehicle
structure of the created to undertake the specific projects and its legal status
individual is that of a private limited company incorporated under the
investee Indian Companies Act, 1956 and registered with the
entities? Registrar of Companies.

6.3Do individual The special purpose vehicle is the entity in which the developer and
investee entities the INDIAREIT Funds have an economic interest. It is
(Special Purpose possible that the SPV has other investors, including other
Companies) have financial investors.
other investors
than the
INDIAREIT
Funds? (i.e.
developers,
constructors,
etc.)
6.4Who will bear All expenses relating to the initial transaction costs of making an
the cost incurred investment are borne either by the Fund or by the SPV. All recurring
at each or annual operating expenses of the SPV are borne by the SPV.
investment Please refer to the Offering Documents for details on Fund
(including initial expenses.
and annual
costs)?
6.5What kind of The following measures are used:
countermeasure
s do you have Firstly, outsourcing the construction to contractors/ developers at a
against cost fixed price.
overrun and time
overrun? Secondly, having an asset manager at the developers site, to track
the developments at the construction site and to guide, liaison with
the Project Managers and the Developers.

Thirdly, hiring project managers for the development helps in giving


a direction, guidance in terms of cost, quality and time
required.
6.6Discuss your IFAPL believes that its management team is unique in that it is
specific value- headed by an experienced ex-developer and backed by professional
add to your managers. IFAPL believes that this allows the team a better
portfolio appreciation of the nuances of the trade including the risks and their
companies mitigation options during land acquisition, development and exit
from investments.
As a result, IFAPL believes that the team brings considerable value
to the investments advised by it which include:

Choice of consultants to deal with basic permissions and


sanctions including land title
Vision to develop state of art signature properties and access
to leading architects, civil contractors, international property
consultants and sales network
Understanding of the market which allows the right spread in
terms of stage wise sales to ensure optimal returns with

40
INDIAREIT Fund Advisors Pvt. Ltd

minimal risks
Monitoring of cost, quality and timing of delivery through
tight monitoring and control over projects and understanding
of the market place
Recommendation on structuring of exit

6.7What are the Typically, the shareholders agreements provide for veto rights on all
typical rights important decisions of its investee companies including but not
that the funds limited to:
have at the SPV
level? Cost, quality and timely delivery schedules
Do you typically Shareholding structure, dividend policy, exit rights and first
take a Board rights of refusal pertaining to all major events involving the
Seat in the partner developer
portfolio Right to take over the project and complete it if the
companies? developer is unable to complete the project within a pre-
agreed time line
Policy matters regarding purchase of materials, choice
contractors and suppliers, sales process and treatment of
sales proceeds

IFAPL serves as a director on the SPVs as a nominee of the


INDIAREIT Funds to effectively monitor and control the project.

Section 7: Land Acquirement, Ownership Rights, Real Estate Development, Taxation

7.1What is the Contracts are typically either development agreements (refers to


conventional construction) / conveyance between land lords (refers to joint
form of development agreements where the land lord may form a party
development to the project by taking consideration in kind, i.e. finishes
(types of property instead of money) / auctioning agencies and the
developer, developer. There are works contracts between developer and
builder, other various contractors who actually undertaken the job of physical
related construction of the property.
businesses and
what kinds of
contracts are in
place)?
7.2What is the legal The INDIAREIT Funds acquire equity ownerships in Real Estate
Real estate projects that are structured as Special Purpose Vehicles
ownership of the (SPVs). These SPVs are incorporated as private limited
companies in companies. The real estate is acquired by the SPV either as a
which the Funds freehold land or long term leasehold land.
invest?
7.3Is there any Land acquisition, past ownership claims etc are possible. However,
record from the the same may be verified from the revenue records and local civic
past to be noted authorities prior to acquisition of the property. This is part of the
as to regulations legal due diligence conducted by our solicitors/ lawyers. Title,
on land entitlement is typically taken care of to a great extent through this
acquisition, such process, however, the same can never be fool proof.

41
INDIAREIT Fund Advisors Pvt. Ltd

as denial of
ownership?
7.4What is the tax Under the SEBI (AIF) Regulations, 2012 as notified, existing funds
treatment for (including Domestic Fund V), shall be governed under Regulation
any distributions 3(2) thereof. The concerned regulation clarifies that such funds
that will be would continue to be regulated under the VCF Regulations till it is
made by wound up, including raising commitments up to its targeted corpus.
INDIAREIT The only restriction is that it may not be permissible for such funds
Fund? to raise its targeted corpus.

In respect of taxation of VCFs, there has been an amendment in the


regime of taxation for under Section 10(23FB) of the Income tax
Act, 1961 (ITA), the tax exemption status for venture capital
funds has been restored for investments in venture capital
undertakings, irrespective of the sectors in which the venture
capital undertaking is engaged.

Revisions made to Section 115U make the VCF a true pass


through. This is by way of (1) the nature of income earned by the
investors would be identical to the nature of income earned by the
VCF; and (2) the income distributed by the portfolio companies can
be taxed in the hands of its Investors directly on accrual basis as
and when accrued by the Fund, or at the end of the year, income
accrued to the fund and not distributed to the Investors shall be
taxable in the hands of contributors, i.e., on a deemed receipt
basis.

7.5Do the In the pre-construction phase, i.e. under-construction buildings


projects/SPVs in the contractor, mandatorily, has to take the 'CAR'
which the (Contractors' All Risk) policy from a general insurance
INDIAREIT company.
Funds invest
have any Post the construction; the residents/developers form a society -
earthquake, fire which charges regular maintenance fees. A part of these fees
and other is 'Sinking Fund' - which is kept by the society and is to be
disaster used for necessary repairs, post the recommendations from
insurance? structural audit, conducted by a registered
architect/engineer, after a stipulated time period.

As far as the insurance for earthquakes/fires is concerned - this has


to be a private initiative of the owner of the said building, as
this is not mandatory yet. All leading insurance companies
offer this insurance service to individual home-
owners/corporates. However, as part of all building
sanctions, all buildings need to obtain NOC from respective
authorities, stating whether the said building is built within
safe norms and has adequate fire-fighting arrangements -
before they can be allowed for occupancy.

These are some general provisions with respect to earthquake/fire


insurance.
7.6Please tell us The standard compliance procedure entails continuous monitoring of

42
INDIAREIT Fund Advisors Pvt. Ltd

how your investee projects at three levels:


compliance
department 'Conditions Precedence' checks: Since the disbursements to
carries out various projects are largely milestone-driven, a check is kept
inspections. If on various projects on various updates and how are they
there is any case progressing vis--vis terms mentioned in definitive
where your agreements, entered into with developers at the time of
compliance initiation. Respective investment team managers generate
department's these reports monthly
checking system
prevented 'Project level reporting' - These could be half-yearly reports,
doubtful actions which look into at both construction/implementation schedules
from taking as well as any material changes in macro environment, which
place please let could have impact on project implementation as well as
us know. returns

'Performance Reports' - These could be quarterly or half-


yearly reports, which compile external reports on given
projects including audit reports by 'Project Management
consultants', financial audit reports, internal audit reports as
well as any 'exception audits' - which need to be mutually
discussed between the Fund & particular developer

Regular compliance on one of our residential projects highlighted


cost over-runs. The issue was immediately highlighted to the
developer and detailed action plan was undertaken to put
these construction costs in compliance with expected levels.
These included helping the developer team up with alternate
civil contractors & other measures to check the escalation.
7.7Can you ensure The civil implementation and construction of a given investee
the quality of project is the responsibility of the developer and IFAPL
workers during largely plays a monitoring role. It works closely with
the construction developers in finalisation of civil contractors. IFAPLs past
rush? team expertise has enabled sufficient exposure & experience in
understanding the quality of workers with various civil contractors
as well as their retention policies. The 'Project
implementation consultants' and respective investment
teams keep track on construction schedules and report
any exceptions.
7.8 Are there The SPV and the developer do hire civil consultants, local municipal
Engineering consultants as well as 'project management consultants' to look into
Reports (on these technical reports.
soil pollution,
earthquake
resistance,
compliance to
the
construction
law etc)? If
there are,
who are
making

43
INDIAREIT Fund Advisors Pvt. Ltd

them?

Section 8: Corporate Governance/ Sponsors

8.1Who are the Piramal Enterprises Ltd is the sponsor of the Domestic Funds and
sponsors? IFAPL acts as the Investment Advisor to the Offshore Funds and
the Investment Manager to the Domestic Funds.
8.2Please provide Piramal Enterprises Ltd (PEL), a flagship company of the Piramal
some Group, is a globally integrated Enterprises company. PEL has
background diverse product portfolio spanning several therapeutic areas.
about the It is also one of the largest custom manufacturing companies
promoter group. with a global footprint of assets across North America,
Europe and Asia. PEL has now ventured into financial
services for lending and fund management for Infrastructure
and other sectors. It has a growth track record of above
29% CAGR since 1988.
Ajay Piramal is the Chairman of the Piramal Group and heading
a multibillion dollar industrial group, having diversified interests
in pharmaceuticals, glass containers, financial services and real
estate development. Within the group, the leading companies
are, inter alia, Piramal Enterprises Limited, Piramal Life Sciences
Limited, Allergan India Limited, Piramal Glass Limited and
Piramal Realty Limited.

8.3How is Piramal Piramal Enterprises is not involved in the day to day running or
Enterprises management of any project / investment made by any of the
involved in each INDIAREIT Funds. The independent management team at
project? IFAPL, with adequate experience and understanding of the
Indian Real Estate market, is involved in the management
and monitoring of various Fund projects.
8.4In contractual The Developer is the leader/promoter of each development project.
terms, who is
the leader of
each
development
project?
Developers, or
the promoters of
the fund?
8.5What are the Decision making of the respective Funds is governed by its
relationships Investment Committee, which is detailed above in Section 3
between the (constitution of the IC) and Section 5 (investment process).
developer,
builder/construc Each of the INDIAREIT Funds enters into an agreement as a
tor, the Piramals financial investor with third party developers. However,
and the Fund (in IFAPL closely monitors the progress of the project to ensure
terms of the timely, cost efficient and quality output.
contracts)?
8.6What are the
profiles of the Ajay Piramal
board members

44
INDIAREIT Fund Advisors Pvt. Ltd

of the Fund?
Ajay Piramal is an eminent business personality in the global
corporate world. His educational qualifications are B.Sc. (Hons.)
from Bombay University, Master in Management Studies from
Jamnalal Bajaj Institute of Management Studies and Advanced
Management Programme, Harvard.

Ajay Piramal is the Chairman of Piramal Enterprisess Limited


and heading an industrial group of over Rs. 4,500 crores, having
diversified interests in pharmaceuticals, glass containers, etc.
Within the group the leading companies are Piramal Enterprises
Limited (largest pharmaceutical company in the domestic
market), Allergan India Private Limited (a joint venture),
Gujarat Glass Private Limited (packaging products for
pharmaceutical and perfumery industries), etc.

Khushru Jijina

Mr.Khushru Jijina is a Chartered Accountant with an illustrious


career spanning over 2 decades in the field of real estate,
corporate finance and treasury management and has been with
the Piramal Group for around 12 years. He was a key member of
the founding team of INDIAREIT in 2006 and was instrumental
in raising two domestic funds (together Rs. 1,014 crores) and
the Offshore Fund (US $ 200 mn) and was also responsible in
deploying a large proportion of these investments. Mr.Jijina was
reinducted in the senior management of INDIAREIT in
September 2012 and is now designated as the Managing
Director. From 2010, as the Managing Director of Piramal
Realty, Mr.Jijina was spearheading the groups foray into real
estate development - Piramal Realty has rapidly built a pipeline
of over 20 million sq. ft. in Mumbai and aspires to build high
quality living and work spaces through customer centric design
and strong execution. Prior to this, Mr.Jijina was the Executive
Director in Piramal Sunteck Realty, where he was responsible for
a portfolio of projects spanning Mumbai, Navi Mumbai, Nagpur,
Jaipur and Oman and oversaw all aspects of their execution.
Mr.Jijina joined the Piramal Group in 2001 as the Vice President-
Treasury and had been instrumental in securing debt at the
lowest cost for the group, setting new benchmarks in the debt
market. He started his career with Rallis, a TATA Group
company, where he held several important positions in
corporate finance over a span of 12 years.

45
INDIAREIT Fund Advisors Pvt. Ltd

Vallabh Bhansali

Vallabh Bhansali is a leading investment banker, venture


capitalist and investor of India. He is the co-founder and
Chairman of Enam a reputed financial services group.

Vallabh Bhansali is a rank-holding Chartered Accountant.

Vallabh Bhansalis professional association is across a large


number of organizations & chambers of Commerce including
SEBI, Bombay Stock Exchange, Investor Grievances Forum, etc.
He has been serving on various Committees of these bodies. He
is a Trustee of the BSE.

Niraj Bhukhanwala

Niraj Bhukhanwala is a MBA from INSEAD, France. He has done


his Bachelors in Electrical Engineering from The Indian Institute
of Technology, Mumbai and also done his Master in Electrical
Engineering from the University of Maryland, College Park.

On the professional front he was a part of the team that set up


Intel's
venture capital operations in India. There he focused on early
stage technology investments. Prior to Intel, he has worked with
Mckinsey and Company in London focusing on pan European
strategies in the telecom and Enterprises sector.

At present, he is Director of Bhukhanwala Holdings Private


Limited It is a closely held boutique investment company and
the primary investment vehicle for the Bhukhanwala Group,
one of the pre-eminent Indian business groups. It is a
registered NBFC with the Reserve Bank of India with
investments across various asset classes with a focus on private
equity investments.

8.7Does IFAL or the Neither the Funds nor IFAPL get any incentives from the developer.
fund get any
incentives from
the developers?
8.8Are there any No, there are no financial relations between the developer and the
financial- administrative company.
relations with
developer as

46
INDIAREIT Fund Advisors Pvt. Ltd

well as
administrative
company?
8.9What is the INDIAREIT has no relationship to Peninsula Land Management
relationship with Company. Both operate in their independent capacities in their
Peninsula Land distinct spheres.
Management
Company, which
is headed by Mr.
Rajeev Piramal?
Is there a
corporate
relationship to
manage real
estate business
of INDIAREIT
Fund, or are
conflicts or
competitive
environment
expected to
emerge?

47

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