A resilient property market backed by perceptions of high quality standards and professionalism has seen private equity investments of at least Rs 400 crore flow into Bangalore-based developers in the last two months.
Global investment firm Xander has bought a49% stake for Rs 150 crore in the retail component of Mantri Developers integrated township,Mantri Serenity,located on Kanakapura Main Road.Sushil Mantri,CMD,Mantri Developers,confirmed the deal .Prior to this,Mantri Developers raised Rs 100 crore from ASK Property Investment Advisors,the real-estate private equity arm of ASK,for its luxury residential project in the heart of the city,near Lalbagh.
On Tuesday,ASK announced another Rs 100 crore fund infusion for a 50% stake in a residential project comprising of villas and apartments being developed by Shriram Properties,located off Sarjapur Road,near the Wipro Campus.Commenting on the companys recent funding activities,Sunil Rohokale,CEO of ASK Investment Holdings,said: Our second round of investments in Bangalore shows our confidence in the outlook for the citys real estate market.The market is stable due to constant job creation.
Samir Jasuja,CEO of real estate analytics firm PropEquity,said Bangalores absorption rate had been fantastic and the market was doing way better than its peer cities in west and north of the country.Jasuja said the PE interest was also because,south-based developers have proven to be much more professional than developers in the west and north.Also,their project execution and quality is far better than what one sees in the rest of the country.
Anuj Nangpal,director of investment advisory in real estate consultancy DTZ India noted,Mumbais real estate market is whopped,Delhi is too investor led and there is a lot of underwriting in sales,Chennai has seen a slowdown,but Bangalore continues to remain strong and steady.
The PE party may continue in the coming months.Project level funding to the tune of Rs 300 crore is on the cards,with deal closures expected to happen as early as end of September.
Century Real Estate led by P Ravindra Pai,one of the largest owners of real estate (about 3,000 acres) in Bangalore,recently raised Rs 40 crore for its project Century Indus,located in Rajarajeshwari,from Anil Ambanis Reliance Capital.Century is in the process of raising an additional Rs 150 crore to be channeled into two SPVs (special purpose vehicles ),and it is said that Reliance Capital may again participate.
Another Bangalore-based premium developer,Jain Heights,is in talks with three fund houses,including Reliance Capital,to raise around Rs 100 crore at the SPV level for multiple projects.The funding is being planned in two tranches a first round of Rs 60 crore and then Rs 40 crore.The first round of funding will see closure by September end,company sources said.From the consumer standpoint,it is very good news when a PE fund comes on board a project,as it guarantees financial stability,and ensures that the project goes on to completion.
FUND FLOW
Xander invests Rs 150 crore for 49% stake in Mantri Serenity retail ASK invests Rs 100 crore in Mantris luxury residential project near Lalbagh and another Rs 100 crore in Shrirams residential project off Sarjapur Road Reliance Capital invests Rs 40 crore in Century Indus Century is raising an additional Rs 150 cr from Reliance Capital for 2 residential projects Jain Heights is raising Rs 100 crore in two tranches,in which Reliance Capital is the front-runner
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