Expected rapid growth in the size of India's property market has emboldened a joint venture group to establish a fund that is aimed at ultra high net worth investors and institutions.

A fund focused on India’s property market and which is pitched at investors such as family offices, ultra-wealthy individuals and institutions is being rolled out by a property firm that has recently drawn in a major new investment partner.

The fund is being issued by RootCorp, a specialist firm in which Savills - the property company - and Nichani Group – an India-based business involved in property and entertainment - are already significant partners.

Expected rapid growth in India's property sector, with the country seen as on an upward path after last year’s election of the reformist Modi administration, forms the background to the fund’s launch.

The new offering is called the India Debt and Yield Opportunities Fund. It will have an internal rate of return target of 20 per cent. RootCorp can deliver large real estate projects of up to 8 million square feet per year in various sectors, including residential, hotel, commercial and industrial, through its shareholders and strategic alliance partners, RootCorp said in a statement.

Indian property firm Sobha Group, which is run by billionaire PNC Menon, now a director of RootCorp, has become a significant shareholder in RootCorp, the statement continued.

RootCorp said India’s property market is expected to surge seven-fold between now and 2028 as the sector looks to deal with an urban housing shortage of around 18.8 million units (based on figures for 2012), rapid growth in sectors such as IT and telecoms, and an expanding retail sector. Domestic tourism is also driving demand for hotels and the hospitality market, the firm said.

“India requires a city the size of Chicago to be built every year to house its growing population,” Suresh Nichani, vice chairman of RootCorp, said.

Rootcorp said it intends to develop further pooled funds as regulated investment vehicles that will invest initially in the Middle East and Indian real estate markets, and also renewable energy. Over time, Rootcorp expects between 50 per cent and 70 per cent of assets under management to be outside of India.