Newstrack

CalPERS to set up US $400 million real estate fund

Savio Rodrigues - Mumbai

Following its initial investment of US $100 million in the Indian equity market two years ago, the California Public Employees' Retirement System (CalPERS), the leading provider of retirement and health benefits in the US, is set to raise US $400 million in the Indian real estate industry, with key focus on hospitality related projects.

Commenting on the new development, Priya Mathur, vice-chairperson, investment trustee committee, CalPERS, said that both the retail and tourism sectors in the Indian market are gaining tremendous momentum and are looking extremely promising to investors, especially the property boom that the country is experiencing. She adds, "We are actively looking at investing in the hospitality segment and are currently pursuing talks with players in this field." However, nothing has been finalised yet on the projects, she asserts. The US $100 million fund that CalPERS first entered into India concentrated purely on investments on technology, pharmaceuticals and manufacturing. Now, however, the group is looking at other booming segments like hospitality and tourism. For its hospitality projects the group is keen to make its presence felt in Mumbai and Delhi, with Hyderabad and Chennai being other options.

Industry pundits state that one of the reasons that triggered such professional interest was that foreign investors who could earlier only buy into projects larger than 100 acres are now allowed to buy 25 acres or more of real estate. The year 2006 has seen Warburg Pincus investing in Bangalore, Morgan Stanley investing US $68 million in Mantri Developers and the Chatterjee Group investing US $450 million, all with a keen interest in hospitality projects.