Kotak Realty Fund has invested Rs 80 crore($16.3 million) in Orris Infrastructure’s group housing project in Gurgaon(Haryana), a top company executive told VCCircle. The latest deal adds to the list of such residential projects in the northern belt of the country to have attracted interest from private equity funds.
A senior executive of Kotal Realty Fund privy to the deal said the investment is for the project called Orris Carnation, which is already under implementation at sector-85 in Gurgaon. “We have invested from our domestic real estate fund,” he said.
The group housing project is spread across 29 acres with a near completed residential apartment called Orris Carnation Residency. The transaction involved issue of optionally convertible cumulative preference shares or OCCPS to the realty fund.
International property consultancy Cushman and Wakefield advised Orris Infrastructure whereas Kotak Realty Fund managed the deal on its own.
Orris Infrastructure is a Gurgaon-based realty company which is owned by Vijay Gupta and apart from real estate it has interests in energy, hospitality and education.
The group has also formed a joint venture with the country’s largest property developer by market value, DLF Ltd called DLF-Orris where it will develop a 50 acre land parcel in Sector 88, Gurgaon for a commercial office space. According to the company, it has a land bank of 1,000 acres with an estimated valuation of Rs 2,500 crore.
Kotak Realty Fund at present has assets under management of $850 million and it has fully deployed its first fund of $100 million called Kotak India Real Estate Fund I. It has recently raised a domestic fund of Rs 523 crore.
In another deal in the same space, Sun-Apollo Real Estate Fund invested Rs 75 crore to acquire 50 per cent stake in Assotech Ltd’s group housing project spread across 12 acres in Sector -99 in Gurgaon. Few months back, India Property Fund had picked up 49 per cent stake in Ramprastha Group’s housing project Skyz in sector 37D in Gurgaon for Rs 120 crore.
These PE deals comes at a time when bank funding has become costlier for developers but residential segment of real estate looks attractive for investment as the rate of interest is now peaking out. Given high suppressed demand for residential units in the Delhi NCR area, investors are betting on uptick in consumer demand for housing as housing loan rates starts retreating from current highs.
Besides these small and mid-size PE deals, the real estate sector has also seen a few large size transactions in the past one year including Ascendas India Trust acquiring a portfolio of five buildings in Phoenix Infocity Pvt Ltd’s SEZ for Rs 855 crore. Kotak Realty Fund sold Peepul Tree Properties (an IT park in Goregaon) to Tata Realty and Infrastructure Ltd and Tata Realty Initiatives Fund 1 for Rs 525 crore. Blackstone invested around Rs 875 crore to buy 37 per cent stake in Manyata Promoters Pvt Ltd and more recently the PE giant also struck another large deal where it acquired Pune SEZ of DLF and Hubtown for Rs 810 crore.