Hallmark Infra In Talks To Raise $20M In PE For Residential Project

Chennai-based realty firm Hallmark Infrastructure is looking to raise $20 million in private equity funding for its 40 acre residential development of villas and row houses, according to a top company executive.

Anand Jain, managing director of the company told VCCircle, the firm is in talks with Paracor Capital Advisors  for raising funds for the project which is located adjacent to Mahindra World City (MWC) in Chennai. Hallmark plans to raise the capital within the next few months.

At present, Hallmark has a developed asset bank of nearly 1 million sqft and it is adding another 4-5 million sqft.

Most of the company’s projects are at Maraimalai Nagar, which is located near MWC. Its upcoming projects include an IT SEZ, a warehouse, a shopping mall, a residential township, villas and service apartments.

If the proposed PE deal materialises, it would mark third successive private equity fundraising in quick succession for Hallmark which has just inked twin deals with real estate PE fund Paracor raise Rs 50 crore each for two separate residential projects in Chennai-- Golden County and Emerald. Emerald is a 0.8 million sqft development whereas Golden County is a 2 million sqft development which already has ready property under its belt.

Knight Frank India was the sole advisor for Hallmark Infrastructure in the twin deals.

Amit Goenka, national director-capital transactions at Knight Frank India, says, "The project is coming up on GST road and enjoys a captive audience of over 30,000 employees who are currently working in MWC and Maraimalai Nagar."

According to a source, “Paracor is looking at an internal rate of return (IRR) of 24-25 per cent from this investment and it has entered the project in the land aggregation stage and will hold 50 per cent stake in the projects. Paracor is looking to stay invested in this project for the next 3-4 years.”

An e-mail query sent to Paracor Capital Advisors spokesperson did not elicit any response.

For PCA this comes as yet another transaction in south India. It has recently struck a deal to invest $6 million through Madison India Real Estate Fund in residential project of Bangalore-based Shriram Land.

India-focused real estate investment fund Madison India Real Estate Fund is managed by Madison Advisors Limited and its Indian advisor is Paracor. Paracor also advises another Mauritius-based fund Paracor India Investments Limited, which focuses on private equity transactions. Paracor Investments typically invests growth capital of between $5-10 million and takes equity stakes of between 26 and 49 per cent. It focuses on investment opportunities in finance, logistics, food & beverage and consumer facing companies.

Although it could not be immediately ascertained the twin deal with Hallmark could also have been under Madison India Real Estate Fund.

The latest deal adds to a clutch of transactions have been announced in Chennai. ASK Property Investments invested around $10 million in a project by Real Value and Reliance Capital invested close to $7 million in another project of L&T and Arun Excello called Estancia.

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