Private equity investments continue to trickle into project or SPV level in the realty space. Sun Apollo India Real Estate Fund LLC, a $630-million India-dedicated real estate private equity fund, has invested Rs 100 crore in a residential project SPV led by Parsvnath Developers Limited (PDL).
SUN-Apollo will invest Rs 100 crore for a 49.9% stake in the project SPV, Parsvnath Buildwell Private Limited, which will develop a premium residential project at Ghaziabad, Uttar Pradesh, spread over an area of 31 acres. The project is called Parsvnath Exotica- Ghaziabad.
The construction work has already commenced and all requisite approvals including sanction of building plans have already been obtained, PDL said in a filing.
“This is the fifth project being developed by us in which foreign investors have made direct investment,” Pradeep Jain, Chairman, Parsvnath Developers Limited, said.
“This is the second project being developed by PDL, where SUN-Apollo has made an investment. In 2009, SUN-Apollo had invested in Parsvnath Exotica Part-II Gurgaon being developed by PDL through its SPV, Parsvnath Hessa Developers Private Limited,” he said.
“The continuous inflow of FDI in projects being developed by PDL shows confidence of the investors in PDL,” he added. An e-mail query sent to Sun Apollo remained unanswered at the time of posting this story.
PDL has completed 42 projects with an area of 12.70 million Sq. ft., and is currently working on 54 projects with a total area of 80.68 million sq. ft. It has land reserves of approximately 193.98 million sq. ft., which is spread over 45 cities and 16 states.
PDL recently sold 24.5% stake to Red Fort Capital, another PE firm, for Rs 120 crore in its upcoming office complex project ‘Red Fort Parsvnath Towers’ in New Delhi’s Connaught Place. In 2009, Red Fort had invested Rs 115 crore in Parsvnath La Tropicana, a group housing project of the company in north Delhi for a 22% stake.
Indian real estate sector has been going through a tough patch with a volatile market and tighthening of loan disbursals (following the loan-scam) limiting financing options.
“Real estate players are looking for funds and PE firms are looking for right valuation. If both come together, it is a win-win situation,” Pankaj Jaju, Investment Director at Enam told VCCircle.
SUN-Apollo, a $630-million India dedicated real estate private equity fund, invests in development and acquisition of assets across property types. SUN-Apollo has developed from a strategic partnership between SUN Group, a leading India business and investment group principally owned by the Khemka family with operations in India, Russia & eastern Europe, and AREA Property Partners (formerly Apollo Real Estate Advisors), one of the most active global real estate investors and fund managers with operations in the United States and Europe.
The shares of PDL closed at Rs 54.90, which is 80 paise or 1.44% down from the previous day closing at BSE.