ASK Property Investment Advisors, the real estate investment arm of ASK Group, has invested Rs 365 crore ($54.4 million) in an ongoing residential project of Mumbai-based real estate developer Rajesh LifeSpaces, the company said in a statement.
The development comes soon after VCCircle exclusively reported that ASK has sealed its biggest deal in real estate with this investment. It usually deploys capital in the range of Rs 100-150 crore through the equity route.
It has deployed capital from two of its domestic funds. Its portfolio has three domestic funds and an offshore offering with funds under management of Rs 3,300 crore and commitment of Rs 2,000 crore across in 19 projects.
The capital has gone to a project located in the eastern suburb— Vikhroli on LBS Marg—and is in proximity to residential projects like ‘Address’ by Wadhwa, ‘Kalpataru Aura’ by Kalpataru and the R City Mall.
Spread across 10.5 acres, the project is aimed at middle and upper middle income households and is expected to be completed by 2020. The firm claims it has revenue potential of Rs 3,000 crore.
Amit Bhagat, chief executive officer and managing director, ASK Property Investment Advisors, said, “The investment goes well with our strategy to invest in top five cities and in mid-segment residential housing projects.”
Sunil Rohokale, chief executive officer and managing director, ASK Group, said, “This is our largest investment to date and we will continue with similar prudence and risk management framework while selecting investments for our other funds to provide superior risk adjusted returns to our investors.”
Notably, this is the second investment of ASK with the realtor. It exited its previous investment in a Mumbai project in May this year, clocking an internal rate of return (IRR) of 26 per cent and multiple of 2.26 times.
Rajesh Patel, managing director, Rajesh LifeSpaces, said, “With this large and prime land parcel in the heart of eastern suburb, we are all geared up to make this a landmark project with all the amenities and supreme standard living for the residents.”
ASK is one of a few firms in real estate private equity to have continued equity strategy even when others have taken safer route of debt/quasi debt deals. It usually repeats investments with its development partners and recently topped up its investment in North-based developer ATS Greens for a Noida project.
The company did not disclose details about the transaction but market sources had told VCCircle that the investment is expected to be disbursed in two tranches over a period of time at an expected IRR of 22 per cent.
During the calendar year, it has also deployed Rs 112 crore in Puravankara’s Bengaluru project and exited from three investments including projects of Rajesh LifeSpaces, Amit Enterprises and Paranjape Schemes.
The realtor, which claims to have delivered eight million sq ft across residential, commercial and retail, recently raised capital from Motilal Oswal Real Estate and Milestone Capital.
Its key projects in and around Mumbai include Raj Grandeur (Powai), White City (Kandivali (E)), Raj Tattva (Thane (W)), Raj Infinia (Malad (W)), Raj Torres (Thane (W)), Raj Altezza (Mulund (W)).