Propshare Capital to Raise 100 Cr for Distressed Property Offerings

PropShare Capital, a tech-enabled commercial real estate investment platform that channels funds from ordinary investors access to rent-yielding commercial real estate, is raising Rs 100 crore for its second distressed property offering. The company raised Rs. 80 crores through its first distressed offering - PropShare Distressed Opportunities Fund ( PDOF I) earlier this year with participation from HNIs and ordinary investors, family offices as well as select institutional investors. A part of this offering has been allocated to a Grade A property in Hyderabad with an estimated internal rate of return of 19%. The first close of PDOF II is expected this Friday, the 18th of September at around. Rs. 50 cr with a total estimated capital raise of Rs. 100 crores. PDOF II has already seen demand for close to Rs. 600 crores on the platform a statement issued by the company said. According to PropShare the dislocation in the financial markets on account of the COVID-19 pandemic has created a unique window of opportunity to purchase Grade A assets at below market prices and yields as a result of the COVID-19 pandemic. The Realty Index in India is down disproportionately at 23% vs. 6.5% for the Sensex as the sector battles issues such as labour migration, disruption in the supply of steel and cement and lower leasing volumes. “We saw this play out in our last acquisition of a Grade A Business Park in Hyderabad with a Fortune 150 tenant. The back office and offshoring centres of Bangalore, Pune, Hyderabad and NCR have remained resilient as these businesses are not as affected by COVID-19 as other industries like hospitality, travel and retail,” said Kunal Moktan, Co-founder & CEO, PropShare Capital. According to Moktan, by investing in distressed offerings, investors are provided 25% lower management and performance fees which subsequently increases their cash yield by upto 1.75%