South India-based developer Shriram Properties has joined hands with the investment arm of Japanese conglomerate Mitsubishi Corporation for an ongoing residential project in Chennai.
The deal marks Mitsubishi’s entry into the Indian real estate sector.
As per the agreement announced by the two companies, the Mitsubishi arm is investing around Rs 180 crore (around $25 million) for a 70% stake in Shriram Park 63.
The residential project is being developed on a land parcel at GST Road in Chennai and has a saleable area of 2 million sq ft.
Shriram Properties claims that the project has pre-sales of more than 25% for the 1,450 units with a revenue potential of more than Rs 1,000 crore in the next three to four years.
“Mitsubishi is another significant addition to the list of marquee partners of Shriram Properties’ projects,” said M Murali, managing director of Shriram Properties.
In the past, Shriram Properties has struck partnerships with several marquee investors including Sun Apollo, Hypobank, Xander, Amplus Realty, ICICI Prudential, Motilal Oswal and ASK Property Investment, among others.
Mitsubishi’s investment comes at a time when a host of east Asian companies have ramped up their exposure to the Indian real estate market.
Korean asset manager Mirae has set up an office in India and is looking to invest significant capital in the country. Its Indian division is headed by Puneet Bhatia, who was executive vice-president with Edelweiss earlier.
Chinese business conglomerate Fosun International had announced its plan to make investments in the Indian real estate market back in 2015, with the appointment of Apurva Muthalia, the former head of Aditya Birla Real Estate. The company has since been on the lookout for deals in the market.
Shriram Properties has four institutional investors – Walton Street Capital LLC, Starwood Capital Group, Tata Capital Ltd and TPG Capital – at the company level.
Private equity firm TPG Capital had picked up a stake of around 15% in Shriram Properties for around $100 million in 2011. In 2014, the developer raised $80 million from Tata Capital’s Tata Opportunities Fund. US-based private equity firm Walton Street owns roughly 24% of the company.
Shriram Properties is part of the financial services giant Shriram Group. The developer has a strong presence across southern India with a diverse portfolio that comprises more than 20 million sq ft of built-up space and around 45.85 million sq ft under development.
Earlier this year, it raised Rs 1,000 crore from ASK PIA, the property investment arm of ASK Group, to fund affordable and mid-income housing projects.