HDFC Property Fund, the real estate investment arm of Housing Development Finance Corp (HDFC), has exited Embassy Property Development Pvt Ltd's 209 acre project in Bengaluru for Rs 487 crore (about $73 million), an HDFC spokesperson told VCCircle.
HIREF 1, the $750 million offshore property fund of HDFC Property Fund, had invested Rs 207 crore in Embassy group's ‘Embassy Springs’ project in 2011. The project comprises villas, row houses and apartments.
The maiden $800 million offshore fund was raised in 2007 and is fully deployed. The firm has so far given back $210 million to its Limited Partners from the fund and has lined up a bunch of exits to return another $500 million by the end of this fiscal.
Last year, HDFC Property Fund decided to put off its plans to float a $500 million (Rs 3,250 crore) offshore property fund in 2016 to focus on exits from its previous fund and invest money from the latest fund raised in March 2015.
“We are also on an exit mode apart from deploying capital from the second fund. The fund's life is coming to an end by 2017; so we have already initiated exits of about four investments, which will take total exits to over $700 million from the fund,” a company executive told VCCircle late last year, requesting anonymity.
HDFC Property plans to exit three more key investments—Embassy Knowledge Park in Bengaluru and two Lodha Group projects in Mumbai and Hyderabad—over five to six months at an estimated exit value of Rs 2,400 crore.
HDFC has deferred its fund at a time when other PE firms are also struggling to kick off offshore fundraising in a big way. ASK Property Investments Advisors, which recently said it would be looking to raise $1 billion through offshore funds, has yet to make a substantial movement on its $250 million realty fund. When last reported, it had reached first close at $50 million in January 2014. It has since then launched a domestic fund to tap local investors.
Meanwhile, alternative investment firm The Xander Group Inc has part-exited Noida-based developer Supertech, pocketing around Rs 415 crore, according to a report by The Economic Times.
The Singapore-based real estate investment arm of the Xander Group had invested Rs 400 crore in the builder's township project in Gurgaon's Sector 79 about a year-and-a-half back in two tranches—Rs 300 crore in first part and Rs 100 crore in the second part—through a structured debt transaction.
Supertech had used the money to pay for more land that it was buying in Gurgaon around its new township.
Supertech has paid Rs 415 crore through a combination of internal accruals and funds raised from Kotak Realty Fund and Indiabulls Real Estate. It had raised Rs 150 crore from Koral Realty Fund in 2014 and another Rs 100 crore from Indiabulls Real Estate in 2015.
The Xander Group Inc is an institutional investment firm focused on long-term, value investing. Xander invests primarily in companies which operate in the infrastructure, hospitality, entertainment, retail and real estate sectors, and currently manages equity capital in excess of $2 billion.