India Real Estate Infra Fund Looking For $100 mn Mop-up End June

MUMBAI: Mauritius-based India Real Estate Infrastructure Fund’s first round of fund raising exercise will come to an end by June by which it plans to mop up one hundred million dollar.

Launched in January, the fund targets a mop-up of two hundred fifty million dollar from across the world for private placements in Indian real estate companies. Balance one hundred million dollar will be raised in the following closures.

“We plan to invest the money in unlisted Indian real estate companies under the FDI guidelines. We prefer to have weightage of up to 50 % in every company so that we can have a ‘say’ in the management. It will help us to drive the policies in the right direction,” said Arun Goel, CEO of DHFL Venture Capital India Pvt. Ltd, which has been mandated to create an investment portfolio on behalf of the fund.

The fund will invest in real estate companies pursuing projects in residential, commercial and hospitality domains which also encompass SEZ, IT parks, hotel.

DHFL Venture has appointed Mumbai based Yen Management Consultants Pvt. Ltd as financial advisor.

The fund will consider factors like the number of development projects in hand, FDI compliance, local presence and growth plans and execution in choosing the company.

Explaining the investment rationale, Goel said, “an increasing population and flourishing services sector have resulted in a number of green field projects to build residential and office buildings. Further, rising cost of hotel accommodations across major cities in India has led to high demand for ones with reasonable rates.”

Besides EU based countries, the fund is getting good response from Japan, the UK, UAE, said Goel, who expects the fund to give 25 % internal rate of return.

“We are getting tremendous response from investors across the board but some of them are currently buying time. They are taking stock of the situation in India. However, they will soon get involved in a 2-3 months time,” revealed Sunil Shirole, managing director and CEO, Yen Management Consultants.

“We strongly believe in the fundamentals of the Indian economy and its prospects. So we have no doubt about the success of the fund,” added Goel, who did not rule out the possibility of a mutual fund by DHFL in two years.


  1. Posted June 4, 2008 at 3:42 am | Permalink

    With the Indian real estate market slated to grow 35-40 per cent in value terms over the next two years, private equity (PE) players are lining up significant investments in the segment. Led by Blackstone and the PE arm of Deutsche Bank, a host of players -including Red Fort Capital Advisors, Starwood Capital and Walton Street – are expected to invest close to US$ 12 billion combined in homes, offices, townships, hotels and other projects. In 2006, markets regulator SEBI opened up the real estate market to PE investments. The first year was a learning period. The following year saw a real correction in the market, with large incremental growth rather than dramatic growth, where stock market money went into special purpose vehicle-level investments. Experts say that in calendar 2007 alone, PE players would have invested US$ five billion in the Indian real estate sector. But there is need for investments of up to US$ 18-20 billion, which are expected in FY09 and FY10. Investments of US$ 1,400 billion are being made by Real Estate Investment Trusts globally. Hence, more global investors will start looking at Indian realty. This investment zeal comes in the backdrop of a much broader enthusiasm that PE players have shown across sectors in India in recent times. This trend is likely to continue strongly through 2010, driven by robust economic growth and attractive market valuations.For more view-

  2. Realty Rider
    Posted June 5, 2008 at 2:03 am | Permalink

    Indians Generating Demand for the UK Real Estate

    Indians have emerged as the largest property buyers in the UK thereby contributing to economic development of the country, as per the data compiled by real estate firms and British Government research. Indian companies in UK has pushed corporate activity to a great extent and the Reserve Bank of India (RBI) move to allow investments abroad to the scale of $100,000 are some major factors listed by broking firms.In 2005-06, India emerged as the third largest investor after the US and Japan. The country moved ahead to 2nd position with the $7.6 billion takeover of Corus Steel by the Tatas in October 2006.Real estate projects from India increased to 76 per cent from mere 11 per cent thereby making India the UK’s third largest investor.Today, the UK houses more than 400 Indian companies. Of this, around 23 per cent have begun their UK operations in 2006. Officials estimated that India’s business operations in the UK are now worth nearly $35 billion.Parking money in London real estate is serving as a status statement for most successful Indian entrepreneurs. Rich Indians prefer to invest in exclusive central London areas since its financial climate is more stable than India.

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