Aditya Birla Real Estate Fund invests $20.3M in Tata Housing and Sidhartha Group’s joint project

The real estate dedicated realty fund of Aditya Birla Group has invested Rs 125 crore ($20.3 million) in a joint residential project being developed by Tata Housing and Sidhartha Group on the Dwarka Expressway in Gurgaon, said sources privy to the development.

The two developers are jointly developing 2 million sq ft area in a 51:49 JV where Tata Housing is the majority partner. The investment is in the form of debt secured against stake of the project.

A source privy to the development said, “It is a fixed return deal for the fund with an investment period of three-and-a-half years.”

The Economic Times had first reported the development.

Tata Housing has been selling the property in the form of expression of interest (EOI) and it has already received EOI for 2,200 apartments against 200 apartments it had put on block.

The developers have already sold close to 0.47 million sq ft area in the project and it is selling 1,300 sq ft and 1,800 sq ft flats with a starting price tag of Rs 1.3 crore. 

The developers are expecting a pre-tax profit of close to Rs 1,200-1,300 crore from the entire project which gives the realty fund an upside of close to three times given the value of securities it is holding.

Sources also indicate that the fund has an option to increase its investment size if the developer adds nearby additional parcels to the project. The fund can then do another round of Rs 45-50 crore investment in that phase. 

When contacted by VCCircle, Apurva Muthalia, CEO, Aditya Birla Real Estate Fund declined to comment on the story.

The real estate fund is part of the Aditya Birla Financial Services Group which in turn is part of Aditya Birla Nuvo Ltd. 

Since Muthalia took charge of the fund in December last year, the Rs 1,000 crore fund has been actively striking deals in the market. In July this year it invested Rs 75 crore in V Raheja’s  residential project located in Andheri in Mumbai. 

Sources indicate that the fund is in talks with Shriram Properties to invest close to Rs 160 crore spread across two projects which include one each in Bangalore and Chennai.

Cushman and Wakefield was the advisor to the transaction.

(Edited by Joby Puthuparampil Johnson)

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