INDIAREIT Fund Advisors, a real estate venture capital fund backed by 3i Group Plc, has exited from its investment in a commercial project in Kurla, Mumbai, being developed by Neptune Realtors.
The fund house is exiting with returns of . 450 crore on an investment of . 145 crore made in 2006, according to two sources with direct knowledge of the deal. Both Neptune and Indiareit Fund held 50% stake each in the land being developed. "The company has made three times the money by selling its stake in the deal that will be announced formally soon" said a person with direct knowledge of the development.
Source: TOI
Neptune Realtors is building a commercial complex over 16 acres in Kurla with a total built up area of 1.41 million sft. The first phase totalling to one million sft will be operational by September 2012. Another person close to the development confirmed the deal. "The deal was closed recently and Jones Lang LaSalle was involved in the transaction," said the person. On being contacted by ET, Ramesh Jogani CEO and MD Indiareit said that he is looking at exiting the Kurla project and should close the deal in another month. However, he refused to comment on the specific of the deals. "We are in the business of making money through buying and selling property," said Jogani when asked why he is looking to exit the project.
Nayan Shah promoter of Neptune Realtors denied the exit. "Indiareit was looking at exiting some five months back but they still remain invested in the company. Work on the site is progressing very fast," he said.
Indiareit Fund Advisors is also looking at partially exiting four to five projects this year, from its large portfolio of residential projects. One of its major exits will come through the proposed . 495-crore IPO of Neptune Enterprise. Indiareit had invested about . 208 crore in Neptune for 15% equity.
"There are many exits planned at the project level by the end of 2011. Funds whose investment period has come to an end would look at exit. This would give them cash flow and help raise new funds," said Amber Maheshwaari director investments DTZ, an international property consultant.
Private equity firms invested about $1.24 billion in 34 deals in India last year, a 69% increase from the same period last year with 22 investments valued at $735 million according to a study by Venture Intelligence , a researcher based in the south Indian city of Chennai. In 2010, five exits worth $1.58 billion took place through buybacks compared to just a single instance in 2009.
Indiareit currently manages one offshore fund worth $200 million, which has 3i Group as the anchor investor. It also manages two other domestic funds — Indiareit Domestic Fund Scheme I with a corpus of . 430 crore and . 537-crore Indiareit Domestic Fund Scheme III.
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