ASK Property Investment Advisors, the real estate investment arm of financial services firm ASK Group, has backed a mixed-use project of North India-based real estate developer ATS Infrastructure, marking its first bet in the commercial real estate space, it said in a statement.
The investor has put in Rs 200 crore (around $31 million) in Knights Bridge, a 3 million sq ft project located in Sector 124, Noida.
“Our investors appreciate risk management framework and focus on asset management. Compounding of opportunity through repeat investments reflects our belief in partner, location and methodology of investments,” said Sunil Rohokale, managing director and chief executive officer, ASK Group.
The deal marks ASK Group’s first investment outside its mainstay of residential real estate. It also marks the investor’s fourth investment in ATS Infrastructure's projects. It has so far given Rs 650 crore to the developer across investments and clocked exits worth Rs 521 crore.
Getamber Anand, chairman and managing director, ATS Infrastructure, said, “Considering the growth opportunities, we are pleased to have a repeat investor like ASK.”
ASK Group, through its real estate investment advisory business, manages Rs 4,350 crore and has committed over Rs 2,400 crore across 33 investments. It has so far raised four domestic funds and an offshore fund. The firm claimed that it has demonstrated an exit record of over Rs 1,900 crore through 18 full and six part exits, clocking 17% to 55% internal rate of return (IRR).
Amit Bhagat, managing director and chief executive officer, ASK Property Investment Advisors, said, “Of the four project investments in ATS, three projects are in Noida which is poised to be one of the fastest growing markets in NCR due to excellent infrastructure, job creation and proximity to Delhi.”
ASK Group’s investment in the commercial segment comes at a time when rent-yielding assets have been the only bright spot in the otherwise gloomy real estate market. Global investors like GIC, Blackstone and Brookfield have been placing bets on the segment for a long time but domestic investors seem to be warming up to the asset class now. Non-banking financial companies (NBFCs) and PE firms have added commercial assets to their investment horizon given the opportunity. Altico Capital, Xander Finance and Piramal Fund Management have added the asset class to their strategy and are actively looking at investments in the space.
According to a recent report by real estate consultancy CBRE, 2016 was a landmark year for the commercial sector with absorption level growing 9% to above 43 million sq ft. The forecast for 2017 is 40 million sq ft, CBRE said.
“The outlook for 2017 is positive with an expectancy of steady growth, stability and revival in the market,” said Anshuman Magazine, chairman, India and Southeast Asia, CBRE.