The first closure of the Axis Commercial Real Estate Fund, a strategic partnership between Axis Asset Management Co and international real estate developer, owner, and operator Tishman Speyer, raised close to Rs 4 billion. Axis AMC and Tishman Speyer have partnered to create the category II alternate investment fund (AIF), which will focus on sustainability, serviceability, and safety as it develops commercial office complexes throughout India's major cities. Axis Asset Management Co. is raising up to Rs 15 billion through this partnership—the first of its kind between a fund house and a major international real estate player in the nation—while Tishman Speyer will serve as the platform's sole development manager. “In its first close, Axis Commercial Real Estate Fund has received a total commitment of Rs 4 billion. The initial close includes Rs 1.5 billion commitment from Axis AMC and Tishman Speyer, apart from investments from family offices, HNIs (high networth individuals), NRIs (non-resident Indians) and so on,” said one of the persons mentioned above. The primary objective of Axis CRE Fund's strategy is to create new, green commercial developments in eight important markets across the nation: Bengaluru, Hyderabad, Chennai, Pune, Ahmedabad, and Kolkata; the National Capital Region; the Mumbai Metropolitan Region; and the Mumbai Metropolitan Region. The fund intends to provide leveraged margins during the project lifecycle for commercial real estate in the development stage. Axis AMC and Tishman Speyer's carefully curated platform is to invest in early-stage greenfield commercial real estate projects in these important areas with the goal of creating Grade A office buildings that will be leased to reputable and significant corporate occupiers. The Axis Commercial Real Estate Fund will have complete control over the project lifecycle, including design, development, leasing, and property management, while Tishman Speyer will serve as the platform's exclusive development manager. The project special purpose vehicle, which in turn will control the land, building, and asset, will be owned by the fund along with the development partner. The fund plans to use lease rental discounting and construction financing to the fullest extent possible to support the projects. The combined investment and development platform hopes to benefit from the high demand for office space, the rapid expansion of global capability centres (GCCs), and the phenomenon known as flight to quality among the top tenants. The Covid-19 pandemic had a significant negative impact on the commercial real estate market, but in 2022 it made a strong rebound thanks to a gradual increase in demand for office space in India's major cities. For the entire year, India's top seven cities had a 46% increase in net absorption for the office sector, reaching a three-year high of 38.25 million square feet. According to data from JLL India, the performance has topped the five-year pre-pandemic average (2015–2019) by 3.1% as well and is second only to the 2019 net absorption figures for the previous ten years. In addition to demonstrating resilience, the office property market surmounted the pandemic-driven challenges posed by the work-from-home model and the emergence of the hybrid work structure to post a record-breaking performance. The pipeline of pre-commitments and ongoing demand for office space is anticipated to boost performance even more in 2023. Investors and industry analysts are optimistic about the commercial real estate sector's long-term prospects. Due to participation from institutional and retail investors, the secondary markets for commercial real estate have experienced tremendous activity and growth during the last six to eight years. See also: Motilal Oswal Alternates to launch funds worth around Rs 20 bn HDFC Capital garners $376 million for affordable projects