Peninsula Brookfield Real Estate Fund, a joint venture between Peninsula Land and Brookfield Financial, has invested in a bunch of ongoing projects of Bangalore-based developer Mahaveer Group, according to separate media reports.
The fund has put in roughly Rs 100 crore ($14.7 million) across five residential projects in the form of non-convertible debentures (NCDs) under the structured debt route. The proceeds will be used for construction and partly to refinance existing lender Motilal Oswal Real Estate.
An email to a spokesperson for Peninsula Brookfield Real Estate Fund didn’t elicit any response till the time of writing this article.
Motilal Oswal Real Estate had invested roughly Rs 60 crore across two projects of the developer in 2014 from its second domestic fund.
This marks the sixth deal of the Peninsula Brookfield fund, which has a corpus of Rs 1,200 crore. It has so far exhausted Rs 800 crore by investing in Umang Realtech in Delhi, and Total Environment and Mantri Developers in Bangalore, among others. It is looking to deploy the remaining amount by the end of March.
Led by Praveen and Naveen Kumbala, Mahaveer Group claims to have completed area of 8.6 million sq ft and has another 6.5 million sq ft under construction at various stages in and around Bangalore.
Developers are increasingly borrowing from non-banking finance companies (NBFCs) and private equity firms for working capital given the slowdown in consumer demand. A large part of the borrowed money is being used to refinance existing lenders.
Recently, IIFL invested $75 million in projects of Mumbai-based developer Ariisto Realtors; Piramal Fund Management put in roughly Rs 200 crore in Chennai-based Arun Excello; and Edelweiss is in talks to back the flagship project of Delhi-based developer BCC.
In 2015, deal making including debt transactions hit a seven-year high of $2.8 billion compared with $2.1 billion in 2014, according to VCCEdge, the data research platform of VCCircle.