Lodha UK, the London development arm of Mumbai-based privately held developer Lodha Group, has raised $375 million (around Rs 2,429 crore) as construction funding from private investment company Cain Hoy, it said in a statement.
The investment has gone to Lodha Group’s residential project in London. Located in Lincoln Square, the project is currently under construction and is expected to be completed in the last quarter of 2018. The company claims it has sold 79 units worth $170 million in the project since its launch in May 2016.
A major portion of the proceeds will be used to complete construction of the project while the rest will go to replace the existing debt from Cain Hoy which had put in money last autumn.
Ab Shome, finance director, Lodha UK, said, “We received competitive offers from three consortiums. We are pleased to partner with Cain Hoy whose ability to provide flexible solutions and perform within our timescale has been invaluable.”
Lodha UK will unveil its second project No 1 Grosvenor Square at Mayfair in London this summer. The project will offer premium residences.
Lodha Group entered the London market in 2013 with the acquisition of Canadian embassy building in London’s Mayfair district for $530 million and followed it up by buying a property called New Court, located on Carey Street for $150 million. The acquisitions had come at a time when some of the other top developers were also bullish on the London market. Indiabulls also bought a prime property for $264 million in London in 2014.
The India arm of Lodha has also raised mega rounds of funding to speed up construction work and finish projects. In the first quarter of 2017, the real estate investment arm of Piramal Enterprises backed the company with a cheque for about $346 million across a bunch of projects. It has also raised funds from Kotak Realty Fund and HDFC Realty Fund over the years for its projects.
The Indian real estate market has been undergoing a slowdown for a long time. As a result, developers have been under a lot of stress and have gone for multiple rounds of financing from NBFCs and private equity funds. While debt continues to be the flavour of the season, deal flow has somewhat slowed down. The total number of debt and equity deals nearly halved in the January-March period of 2017 from a year earlier, according to VCCEdge, the data research platform of News Corp VCCircle.