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ADIA, Kotak AIF ink $240 mn real estate deal with Prestige Estates

By Priyal Mahtta

  • 01 Apr 2024
ADIA, Kotak AIF ink $240 mn real estate deal with Prestige Estates
High-rise buildings in Mumbai | Credit: Reuters/Francis Mascarenhas

The Abu Dhabi Investment Authority, a sovereign wealth fund of the Gulf emirate, and India's Kotak Alternate Investment Fund have signed a Rs 2,001 crore (about $240 million) deal with Prestige Estates Projects Ltd for housing projects.  

The deal involves the development of residential projects across Bengaluru, Mumbai, Goa, and the National Capital Region, Prestige said in a stock exchange filing Monday, marking the Gulf-based sovereign fund’s foray into India’s residential real estate market.  

The projects have a combined gross development value of over Rs 18,000 crore ($2.16 billion), it said.  

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“Given the increasing demand and consolidation in the sector, this deal will help in accelerating growth and expansion,” said Venkat K Narayana, the group chief executive of Bengaluru-headquartered Prestige Group.   

While the details of the projects weren’t announced, the exchange filing said that these investment proceeds would be used for developing early-stage residential projects.   

The investment is in line with the robust growth seen in the residential segment over the last year, with an expectation of a continued uptick in housing demand.   

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ADIA is a backer of Mindspace Business Park REIT, as well as a limited partner in Kotak's 13th real estate fund. 

According to a report by property consulting firm Anarock, housing sales in India’s top seven markets – Delhi NCR, Mumbai Metropolitan Region, Bengaluru, Pune, Kolkata, Hyderabad, and Chennai, rose 14% year-on-year in the quarter ended March, with Mumbai and Hyderabad markets seeing the sharpest jump in sales.  

However, the Delhi NCR market saw a 9% on-year decline in housing sales. Goa, on the other hand, is an up-and-coming residential market, especially for second-home ownership. According to a report by India’s Sotheby International Realty (ISIR), about 35% of India's holiday home buyers prefer Goa as their investment destination.  

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