The transaction involved issue of
optionally convertible cumulative preference shares to Kotak Realty Fund.
Kotak
Realty Fund has invested Rs 80 crore($16.3 million) in Orris Infrastructure’s
group housing project in Gurgaon(Haryana), a top company executive told
VCCircle. The latest deal adds to the list of such residential projects in the
northern belt of the country to have attracted interest from private equity
funds.
A
senior executive of Kotal Realty Fund privy to the deal said the investment is
for the project called Orris Carnation, which is already under implementation
at sector-85 in Gurgaon. “We have invested from our domestic real estate fund,”
he said.
The
group housing project is spread across 29 acres with a near completed
residential apartment called Orris Carnation Residency. The transaction
involved issue of optionally convertible cumulative preference shares or OCCPS
to the realty fund.
International
property consultancy Cushman and Wakefield advised Orris Infrastructure whereas
Kotak Realty Fund managed the deal on its own.
Orris
Infrastructure is a Gurgaon-based realty company which is owned by Vijay Gupta
and apart from real estate it has interests in energy, hospitality and
education.
The
group has also formed a joint venture with the country’s largest property
developer by market value, DLF Ltd called DLF-Orris where it will develop a 50
acre land parcel in Sector 88, Gurgaon for a commercial office space. According
to the company, it has a land bank of 1,000 acres with an estimated valuation
of Rs 2,500 crore.
Kotak
Realty Fund at present has assets under management of $850 million and it has
fully deployed its first fund of $100 million called Kotak India Real Estate
Fund I. It has recently raised a domestic fund of Rs 523 crore.
In
another deal in the same space, Sun-Apollo Real Estate Fund invested Rs 75
crore to acquire 50 per cent stake in Assotech Ltd’s group housing
project spread across 12 acres in Sector -99 in Gurgaon. Few months back, India
Property Fund had picked up 49 per cent stake in Ramprastha Group's housing
project Skyz in sector 37D in Gurgaon for Rs 120 crore.
These
PE deals comes at a time when bank funding has become costlier for developers
but residential segment of real estate looks attractive for investment as the
rate of interest is now peaking out. Given high suppressed demand for
residential units in the Delhi NCR area, investors are betting on uptick in
consumer demand for housing as housing loan rates starts retreating from
current highs.
Besides
these small and mid-size PE deals, the real estate sector has also seen a few
large size transactions in the past one year including Ascendas India Trust
acquiring a portfolio of five buildings in Phoenix Infocity Pvt Ltd’s SEZ for
Rs 855 crore. Kotak Realty Fund sold Peepul Tree Properties (an IT park in
Goregaon) to Tata Realty and Infrastructure Ltd and Tata Realty Initiatives
Fund 1 for Rs 525 crore. Blackstone invested around Rs 875 crore to buy 37 per
cent stake in Manyata Promoters Pvt Ltd and more recently the PE giant also
struck another large deal where it acquired Pune SEZ of DLF and Hubtown for Rs
810 crore. Source: VCCircle
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