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Brookfield to invest $125 mn in Total Environment’s projects

10 August, 2017

Canadian asset management company Brookfield is in advanced stages of talks to invest Rs 800 crore ($125 million) in a bunch of projects of Bengaluru-based developer Total Environment Building Systems Pvt. Ltd, two media reports said.

The Economic Times reported, citing people familiar with the development, that the funding has gone to six projects spread over 3 million sq ft. The capital infusion is in the form of debt funding and has an equity kicker, it said.

Total Environment will use the funds to repay its debts and finish its projects, Mint said in a separate report.

Brookfield and Total Environment declined to comment.

Brookfield, which has emerged as one of the strongest investors in India’s real estate sector, has put in the money through its global fund that has a target corpus of $9 billion. It had previously invested Rs 450 crore from the fund in a project of Peninsula Land Ltd in Mumbai.

Indian developers across cities are increasingly raising capital to replace debt from existing lenders. The slow sales momentum has forced the developers to go for multiple rounds of funding to stay afloat in the market.

Total Environment itself raised Rs 200 crore from the non-banking financial company arm of L&T Finance last year. It also mobilised Rs 300 crore from HDFC Capital, real estate private equity arm of HDFC Group, last year.

The Bengaluru developer, which has a presence across residential and commercial segments, has seven million sq ft of residential projects under development and claims to have delivered 30 million sq ft.

A number of global and domestic fund houses have ramped up their exposure to real estate lately given the opportunity in the segment. While NBFCs such as Xander Finance, Altico Capital and L&T Finance have been pumping in capital, global investors such as KKR, GIC and Brookfield have been making strategic bets on the sector.

The real estate sector has seen a host of debt transactions lately. Recently, Motilal Oswal Real Estate, the realty investment arm of Motilal Oswal, backed a project of North India-based developer ATS Infrastructure with an investment of Rs 120 crore. The developer also received Rs 200 crore for a mixed-use project from ASK Property Investment Advisors, the property investment arm of ASK Group.

In North India, other developers which have recently raised money include Logix Group, which mopped up Rs 900 crore from PNB Housing Finance, and Gurgaon’s AIPL, which secured around Rs 300 crore from Piramal Group and Reliance AIF.

According to VCCEdge, the data research platform of VCCircle, the sector attracted around Rs 2,918.95 crore in the first six months of 2017. This is up from Rs 1,209.95 crore the sector attracted in the six months ended December 2016.

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Brookfield to invest $125 mn in Total Environment’s projects

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