PE investments give cash-hit realty sector a new lease of life

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SummaryHome-grown private equity funds seem to have opened their purse strings again for the realty sector, which is facing a cash crunch.

Home-grown private equity funds seem to have opened their purse strings again for the realty sector, which is facing a cash crunch.

ASK Group is looking at investing R800-1,000 crore in residential projects over the next one year in Mumbai, Delhi and NCR, Bangalore, Chennai and Pune, while Ajay Piramal-owned Piramal Group's private equity arm Indiareit is ready to commit additional funds from its redevelopment fund.

ASK, a diversified financial services group, has two funds called ASK Real Estate Special Opportunities Portfolio-1 and ASK Real Estate Special Opportunities Fund.

While the company has committed 100% of the funds raised in Portfolio (R326 crore), a major part of these fresh investments will come in from the second fund of R1,000 crore, Amit Bhagat, CEO and MD, ASK Property Investment Advisors told FE.

ASK has already made five investments from its second fund raised in 2011-2012.

The latest investment was of R147 crore made in a residential project of ATS Group in Gurgaon in July. “The new investments will also be in the top five realty markets of Mumbai, Delhi & NCR, Bangalore, Chennai and Pune. We are not looking at Hyderabad at the moment as there is some more clarity required in the political landscape of the city,” said Bhagat.

ASK is also in the process of raising $200 million through an offshore fund as well.

Private equity investments activity is picking up in realty projects.

The investments into real estate by private equity funds surged to $1,885 million (R11,687 crore) in January-September against $1,235 million (R7,657 crore) in the first three quarters of last year, data sourced earlier by FE from VCCedge showed.

VCCedge is a data service by VCCircle.

Indiareit has invested R450 crore so far and is committing additional funds from its Mumbai Redevelopment Fund (MRF) in the coming months, said Khushru Jijina, MD, Indiareit.

From MRF Rs 100 crore has been invested with Omkar's Crescent Bay project coming up in central Mumbai.

From its Fund IV, IndiaReit has invested R100 crore with Marvel for projects in Pune, Bangalore and Mumbai, while from Fund V, R100 crore has been

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