WestBridge-backed PropShare Capital launches second real-estate fund

Online real estate platform PropShare Capital said on Thursday it has launched the second fund as part of its alternative investment fund (AIF) strategy to invest in rent-generating commercial real estate.

The PropShare Real Estate Fund II (PREF II), a category-II AIF, has a target corpus of ₹500 crore with a green-shoe option of ₹200 crore and will invest it across completed Class A rent-generating commercial properties leased to multinational and blue-chip tenants in India’s tech hubs.

For its previous fund PREF I, launched in March 2021, PropShare Capital aimed to raise ₹700 crore but could only put together ₹75 crore. Through the maiden vehicle it invested in four commercial properties in Bangalore and Mumbai, which have been leased out to companies such as LG, Tata Finance and 24/7 AI.

“The current high-inflation and high-interest-rate environment has increased yields on all asset classes including commercial real estate. Since yields are inversely proportional to asset prices, this has led to high quality Class A offices being available at distressed prices,” said Kunal Moktan, CEO and co-founder, PropShare Capital. “This has opened a unique one-time window for opportunistic investors to acquire quality Class A assets at above-market yields,” he added.

The fund's limited partners will include institutional investors, family offices, high net-worth individuals (HNIs), and resident and non-resident Indians.

The realty investment platform counts Westbridge capital, LightSpeed Venture Partners, Pravega and BEENEXT as its investors. It last raised funds in June 2022, when it secured $47 million (around ₹376 crore then) as part of its Series B funding round led by homegrown private equity player WestBridge Capital at a valuation of $170 million. In 2019 TechCircle reported that the Propshare had raised Series A funding in a round led by venture capital firm Lightspeed Venture Partners.

Founded in 2016 by Moktan and Hashim Khan, Propshare allows users to access institutional-grade assets with 8-10% in-place rental yields and 17-20% returns. The company handles the sourcing, due diligence, property management and sale on behalf of users, and claims to be owning, managing and exiting commercial real estate simple and transparent.

Moktan, an IIM-Ahmedabad alumnus, was part of the Blackstone Group’s India real estate team before starting Propshare. Khan, an IIT-Kanpur and IIM-Ahmedabad alumnus, spent over a decade in the retail, trading and real estate sectors before becoming an entrepreneur.