New Delhi, July 1 -- The partnership between asset management company Axis Asset Management Company Ltd and the India arm of US-based real estate firm Tishman Speyer has run into trouble, people familiar with the matter told VCCircle.

In 2022, Axis AMC and Tishman Speyer launched a Category-II alternative investment fund (AIF), Axis Commercial Real Estate Fund, through a partnership model. As part of the deal, Axis Real Estate was tasked with managing the fundraise, while Tishman had the responsibility of developing and managing the projects.

The fund, which had a target corpus of Rs 1,000 crore and a greenshoe option of Rs 500 crore, aimed to invest in early-stage or greenfield commercial real estate projects across eight key markets, with the goal of creating best-in-class office buildings to be leased to marquee clients.

The platform was created to leverage Axis's fundraising network and Tishman's skillset in project design, development and relationships with anchor tenants looking for commercial office properties.

While the platform managed to raise Rs 500 crore by 2024 and sealed its initial two deals, it has made little progress since then.

"It has not been able to move ahead as per the original plan of building a portfolio of projects. It has been more than four years since the platform was sealed, but the real groundwork is limited to two land parcel deals," one of the people cited above said.

A second person said the platform has faced difficulty in securing approvals for project construction, resulting in massive delays in project timelines.

"Also, there is a mismatch in alignment between the two platform partners, leading to a complete breakdown of the partnership," the person added.

Both persons said the platform will not undertake any new projects together.

"This has been in the offing for a long time. There were issues related to management, timeline and approvals. It is virtually a broken platform now," the people said.

In its maiden investment, the platform acquired a 1.5-acre plot in Chennai with plans to develop a 4 lakh square feet Grade-A office building. In another deal, the platform partnered with Kasturi Housing to develop a commercial and IT office project spanning around 1 million sq ft.

It was not immediately clear what the future holds for these projects.

Emails sent to spokespersons for Axis Asset Management and Tishman Speyer remained unanswered till the time of publishing this article.

The development comes soon after Tishman Speyer India's managing director and country head, Parvesh Sharma, stepped down. As reported by VCCircle, Sharma quit after serving for almost 15 years at the firm, which is now searching for his replacement.

Interestingly, Balaji Rao, who was the head of Axis Real Estate at the time of the partnership formation between Tishman and Axis AMC, has since joined Tishman Speyer India as an advisor. He is currently advising the firm in the absence of a country head.

Apart from the commercial real estate fund, Axis Asset Management manages two residential real estate-focussed funds, Axis RERA Opportunities Funds I and II, which achieved final closes in 2019 and 2023, respectively.

For the first residential fund, the firm raised about Rs 400 crore ($45.4 million), while for the second, it raised Rs 200 crore. The first fund has exited five of its six investments, fully returning capital to investors with an upside.

The second fund has committed 90% of its corpus and exited one investment. The remaining capital will be deployed before the fund's life comes to an end in 2028.

Globally, Tishman Speyer has a presence across the US, Europe, Asia and South America. Its portfolio spans luxury and affordable residential communities, office properties, retail spaces, industrial facilities and mixed-use campuses. The company also develops life sciences centres through its Breakthrough Properties joint venture and supports innovation through proptech platform TS Ventures.

Published by HT Digital Content Services with permission from VC Circle.