Sun-Apollo India Real Estate Fund has made its second investment in as many months by betting on a residential project of Assotech Limited, a Noida-based real estate company. Sun Apollo has invested Rs 75 crore to pick up a 50 per cent stake in the company’s residential project in Gurgaon.
With projects worth Rs 3,300 crore under its belt, Assotech has received the investment for its special purpose vehicle, Assotech Moonshine Developers Pvt Ltd which is now a 50:50 joint venture between Assotech and Sun-Apollo’s, $630 million India dedicated fund.
Rajeev Rai, chief operating officer, COO, Assotech Ltd, said the 12.6 acre group housing project is coming up at Sector 99 in Gurgaon. “As this investment falls under foreign direct investment (FDI) , the fund has a minimum lock in period of three years and it can look for an exit by five years. The minimum benchmark for return is 16 per cent whereas the maximum is 22 per cent,” he said.
The project will be launched within the next three months. The company has applied for sanctions to the Haryana state government.
In late December, Sun-Apollo India Real Estate Fund had invested Rs 45 crore to buy 49 per cent in Godrej Premium Builders Pvt Ltd, a subsidiary of Mumbai-based realty firm Godrej Properties Ltd. Under the deal, Sun-Apollo paid Rs 18.3 crore to Godrej Properties for purchase of shares and the balance Rs 26.7 crore has been invested in Godrej Premium Builders which is currently developing a project in Gurgaon.
Sun-Apollo was developed from a strategic partnership between Sun Group, a business and investment group principally owned by the Khemka family with operations in India, Russia & eastern Europe, and AREA Property Partners formerly known as Apollo Real Estate Advisors, an active global real estate investor and fund manager with operations in the United States and Europe. Sun-Apollo was earlier headed by Chetan Dave, who moved onto IDBI to head its real estate fund.
Although the private equity action in Indian real estate sector has been muted, there have been a few large deals last year, besides a string of small and mid-sized deals across income-generating developments.
In February 2011, Ascendas India Trust entered a deal to acquire a portfolio of five buildings in Phoenix Infocity Pvt Ltd’s SEZ for Rs 855 crore. Also, Kotak Realty Fund 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.
Blackstone invested around Rs 875 crore to buy 37 per cent stake in Manyata Promoters Pvt Ltd, a SEZ promoted by Bangalore-based real estate developer Embassy Property Developments Ltd, and the landowner Veeranna Reddy. More recently, Blackstone also struck another large deal where it has acquired Pune SEZ of DLF and Hubtown for Rs 810 crore.