This week Abu Dhabi Investment Authority (ADIA) made an announcement that it is about to make direct investments in the Indian real estate sector.
ADIA has invested money in India’s international property market through a variety of real estate and private equity funds, and its total holdings in India are estimated to be worth between $400 million and $500 million.
To look for direct real estate opportunities in India, the sovereign fund is looking to hire a fund manager from a private equity firm.
The news comes as many developers in India are seeking funds to begin new projects and to reduce their debts, which currently stand at 1.8 trillion rupees approx.
Although, being Asia’s third largest economy, residential property developers in India is facing a major funding gap as home prices stay low and the country’s banks go on playing it safe when it comes to lending to the real estate sector.
An India-centric private equity fund, Red Fort Capital has recently accepted a $50 million investment from ADIA and has already raised $80 million of its planned $500 million for its second India dedicated property fund. Property accounts for 5% to 10% of ADIA’S global portfolio, whilst North America and Europe account for 60% to 85% and the emerging markets 15%.
