Walton Street BlackSoil Real Estate Debt Fund II has closed two transactions and deployed Rs 110 crore ($14.8 million) of debt in two housing projects in Chennai and Hyderabad.
The fund has deployed Rs 65 crore in Krishnaiah Projects Pvt Ltd’s project Zion in Chennai and Rs 45 crore in Jain Housing Constructions Ltd’s Salzburg in Hyderabad. Both projects are in the mid-income housing segment.
Earlier in September, Walton Street BlackSoil Real Estate Debt Fund II said it had made a first close of Rs 360 crore and will offer debt financing to largely mid-income, residential projects in the top six cities.
The fund has a target corpus of Rs 500 crore, with a green-shoe option of Rs 250 crore. Domestic high-net worth individuals (HNIs) and family offices have invested in the fund which will be fully raised by December.
The debt fund is registered with the Securities and Exchange Board of India as a Category II alternative investment fund.
Both the transactions are in line with Walton Street BlackSoil Real Estate Debt Fund II’s plan to pursue residential structured debt investments in projects with developers that focus on execution and delivery.
The fund will also target six to eight more investments in Hyderabad, Bengaluru, Chennai, Pune, Mumbai and National Capital Region.
Zion is in the last phase of a township comprising 1,800 families.
“The mid-income housing segment has shown great promise. In the last one year, the segment has gained prominence and has led the share of new launches. Gradual pickup in sales volume has been witnessed in this market segment following recent relaxations in lockdowns and other factors such as higher absorption than supply, improved affordability, and favourable government policies,” said Vimal Jangla, managing partner at Walton Street India.
“The focus of our second fund is to provide financing to developers with proven track records of execution across the mid-income housing sector in our key markets driven by end-user demand, to invest in key in-fill projects with full control over cash flow and visibility on financial closure and completion,” Jangla added.
From 2013 till the launch of Walton Street BlackSoil Real Estate Debt Fund II, Walton Street India and BlackSoil have jointly invested over Rs 1,500 crore of debt capital across fifty transactions.
Recently, BlackSoil and the former India-based management team of Walton Street Capital, LLC acquired Walton Street India’s real estate debt business. The India management team is led by Kaushik Desai, Vinit Prabhugaonkar and Jangla.
As a result of the buyout, Walton Street India is no longer affiliated with Walton Street Capital, LLC.