India Real Estate Monitor

Private equity firm Red Fort Capital preparing to spend about Rs 2,700 crores in real estate by 2009, including acquisition of 2,500 acres of land in over 20 cities all over the country.
“By 2009 we would have empowered about Rs 2,700 crores in expansion of projects in Indian real estate. Out of which, about 70% will be invested in acquiring 2,000-2,500 acrs of land in outer edge of metros and tier II cities,” Red Fort India Real Estate Fund’s managing director Parry Singh said. The company will grow properties worth Rs 12,000 crores, he said adding “ the individual developers will also invest their share of the remaining equity amount on a project-by-project basis.”
Red Fort Capital (RFC) has already purchased over 1,000 acres of land in different parts of the country, he said, while adding “We are aggressively looking at 21 cities, with a strong interest in Mumbai, Pune, Chennai, Hyderabad, Bangalore, Kolkata and Vishakhapatnam markets.” Having dedicated a important segment of the first fund of $425 million, Red Fort is now in the process of utilizing the freshly initiated Rs 1,000 crores domestic fund.
“About Rs 800 crore of the domestic funds will be put in land purchase,” he added. The company is in the process of acquiring about 200 acrs of “relatively cheap” land in the border of Mumbai, he said. The company would build up residential, commercial, hotels, hospitals and retail spaces in these lands. “The fresh arguments have made us further gun-shy of developing Special Economic Zones,” Singh said.
On bind with developers, Singh said, “We tend to focus on mid-size developers, given our capability to add financial power as well as technical ability in project development and execution.”
The company would develop about 10,000 residential units in Bangalore over the next eight years, where as it would generate about 2,000 residence units in three years in Hyderabad, Singh informed. Besides, RFC is also presently developing properties in Chennai. On its possible raising capital from the public markets, he said: “The domestic fund has potential to be listed in the next three years.”
He, however, refused to disclose any details. Asked whether the existing floor area ratio (FAR) in the country should be enhanced, Singh said, “If infrastructure is poor, then FAR shouldn’t be increased. Developers should be allowed to build infrastructure and then increase the FAR.”