Pragnya Fund, a Mauritius-based and real estate-focused private equity fund, has invested around $5 million (Rs 25-27 crore) in Hyderabad-based Vision Heights Ltd to develop a 50-acre township in Rajahmundry, Andhra Pradesh.

The integrated township project, launched in early 2010, will feature 150 luxury villas, 1,000 apartments of different dimensions and senior citizen apartments, with host of amenities like schools, multi-specialty hospitals, clubs and commercial complexes, etc.

Pragnya Fund has been in the real estate investment business in India and Sri Lanka since 2005-2006. The fund has been sponsored by Subba Rao Dukkipati and Gopal Menon, and has invested in eight realty projects till date, to deliver a total built-up space of about 13 million sq. ft.

The fund’s current investments include L&T Eden Park, a 90 acre integrated township being developed in partnership with Larsen & Toubro in Chennai, L&T Tech Park – an IT SEZ project in Kochi, a mixed-use project in Colombo and two residential projects at Asansol and Barrackpore in West Bengal, a residential project with Chennai’s VGN Developers and a villament project in Whitefield, Bangalore. Incidentally, this will be the second project of Pragnya in a tier III city.

“Rajahmundry is an emerging tier III city and this investment is in keeping with Pragnya’s strategy of looking for opportunities where we have a first mover advantage,” Subba Rao Dukkipati, Managing Partner of the fund, commented on the investment.

“Besides the capital investment, we also needed an experienced, strategic partner because it is a large project,” said Lakshmi Prabaakar, managing director of Vision Heights Ltd.

In October this year, Ambuja Realty acquired the RMZ block of Ecospace Business Park in New Town (Rajarhat), Kolkata, for an undisclosed sum. Also in September, Chennai-based Kalpathi Group, with business interests in private equity and entertainment, acquired the IT park Rantech Towers for around Rs 50 crore. Spread over 2.2 lakh sq. ft., the IT park is located at Sholinganallur (on Old Mahabalipuram Road) in Chennai. Of the eight-storey building, 15 per cent area will be for self-use by the group and the rest will be commercially leased/rented out to other IT companies.

Although the private equity action in Indian real estate sector has been muted, there have been a couple of large deals this year across income-generating developments. In February this year, Ascendas India Trust entered a deal to acquire a portfolio of five buildings in Phoenix Infocity Pvt Ltd’s SEZ for Rs 855 crore. Kotak Realty Fund also 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.

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