ASK Property Investment Advisors, the real estate private equity arm of ASK Group, has marked the initial close of its seventh domestic fund—ASK Real Estate Special Situations Fund I—at Rs 535 crore ($83 million).
The fund has a target of Rs 1,000 crore with a green-shoe option of an equal amount. It was launched almost a year ago to invest in affordable residential projects where sales have fallen.
“The objective of this fund is to provide flexible and patient capital. Currently, developers’ balance sheets and individual projects are facing a cash crunch. Our research team identifies bankable projects that need this capital,” Amit Bhagat, managing director and CEO at ASK Property, said in a statement.
He said the focus on construction and project completion coupled with declining home loan interest rates will revive residential real estate demand, leading to an improvement in cash flows that are sufficient to generate returns.
“This strategy also complements the Real Estate (Regulation and Development) Act which focuses on completion. Keeping in mind the current requirement of the developer, structured/preferred equity investments are planned to be provided through this fund,” Bhagat said.
Sunil Rohokale, managing director and CEO at ASK Group, said, “We have a track record of raising funds through institutions and family offices of which a majority of commitments is from existing investors in this fund. This year, we would like to deploy Rs 1,000 crore with average investments of up to Rs 200 crore.’’
ASK will continue with its strategy to invest across top six cities and tie up with reputed developers. It will back projects at construction stage with all the approvals in place.
ASK Property, which has raised funds from both offshore and domestic investors across funds, raised Rs 326 crore under tough market conditions in the period between March and December 2009. It raised a second domestic fund worth Rs 1,000 crore in 2011 and a third domestic fund of Rs 1,400 crore in 2016. ASK Group has also raised Rs 550 crore for its maiden offshore fund and structured debt of over Rs 575 crore for developers.
The firm recently opened up its investment horizon for commercial real estate and backed a mixed-use project of north India-based developer ATS Infrastructure. The PE firm is bullish on commercial real estate given the momentum in the space and is likely to float a commercial fund in the future.
Like this report? Sign up for our daily newsletter to get our top reports.