PremjiInvest seals $10M apartment bulk-buying deal with realtor Total Environment

PremjiInvest, the private investment arm of Wipro chairman Azim Premji, has sealed an apartment bulk-buying deal with Bangalore-based developer Total Environment, making what would be its first publicly known real estate investment.

The fund has bought a bunch of apartments in a residential project called 'Windmills of Your Mind' located in Whitefield for Rs 60 crore ($9.6 million), a top company executive told VCCircle.

Kamal Sagar, chairman and managing director, Total Environment Building System, said, “We have sealed the deal under bulk-buying agreement with the fund. We are currently not in talks with the fund to raise more capital.”

The Economic Times, which first reported on the transaction, said PremjiInvest has bought around 10 per cent of the flats in the project.

Sagar did not confirm the number but added that the company is in talks with a bunch of other real estate-focused private equity funds to raise as much as Rs 450 crore ($72 million) for upcoming projects.

Windmills of Your Mind, located in Whitefield, Bangalore, is spread across 24 acres and offers 405 apartments in seven towers and 73 villas. It also offers 160 duplex apartments and 20 triplex homes across five towers.

The company is launching a couple of residential projects which include Songs from the Wood (Pune), Pursuit of a Radical Rhapsody (Bangalore) and The Magic Faraway Tree Phase I (Bangalore).

Bulk-buying as a way of deal-making has become a preferred mode of sealing realty deals over the last few months. The structure of the deal allows private equity funds to buy apartments in bulk at a deep discount and offload it later through a mutually agreeable exit.

Some of the PE firms which are active in this space include Khushru Jijina-led Piramal Fund Management and NIFCO formed by former CEO of Essel Finance Amit Goenka. The latest entrant in the space is former chief of Piramal, Ramesh Jogani, who is tying up with Centrum Finance for a fund themed on bulk-buying.

Meanwhile, this transaction marks the debut deal of the family office of Wipro chief in real estate domain. A senior executive of the company has been reportedly quoted as saying, "We have no plans of buying real estate. The current investment has been made to seek returns once the project is completed.”

The family office has so far invested in technology and e-commerce companies. Early this year, it invested $50 million in fashion e-tailer (now merged with Flipkart) Myntra.

In May this year, it invested $20.8 million in the fashion apparel, accessories and associated products arm of Kishore Biyani-led Future Group Future Lifestyle Fashions.

In September, it also participated in a $106 million Series C round of funding in California-based software firm Datastax Inc, which operates under the DataStax banner and manages databases, along with other investors.

(Edited by Joby Puthuparampil Johnson)

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