Social media now a hunting ground for real estate deals

Last week, Amar Merani, chief executive and managing director of Xander Finance , the lending arm of Singapore-based private equity firm Xander, asked for last-mile or finished commercial and residential inventory deals for long-term structured credit on his Linkedin profile.

Merani said manufacturing and service companies outside real estate - but having a robust business model, distinct cash flows, and model leverage - can also reach them.

With physical business development (BD) being low, certain cash-rich PE funds and non-banking firms are seeking deals for last-mile funding or stalled proejcts on social media platforms to build their pipeline. “We cannot physically reach all developers who have inventory and find out who has how much. We are reaching out to developers and intermediaries through social media,” said Merani. He said the firm will do deals of ~30-50 crore. “We want to deploy money in three-six months when people are dormant,” said Merani. He added the firm has deleveraged its balance sheet in the past two years, has cash on its books, and is looking to raise money in the near future.

SBICAP Venture’s SWAMIH (Special Window for Affordable and Mid-income Housing) Fund is also active on professional networking sites. “We have taken another step forward to support the real estate sector. Given the extraordinary circumstances, SWAMIH Investment Fund 1 shall now provide construction funding at 12 per cent internal rate of return,” said Irfan A Kazi, chief investment officer, SWAMIH Fund.

The ~25,000-crore SWAMIH Fund announced by the government for completion of projects saw its first closure of ~10,000 crore in December last year. SBICAP Ventures is the fund manager for SWAMIH.

Rituraj Verma, partner at Mumbai-based Nisus Finance Services, recently came out with a post on Linkedin, stating it is looking to invest in stalled residential projects in Mumbai, Pune, Hyderabad, and Bengaluru through its AIF2 Dalmia Nisus Fund. The fund will strike deals by issuing nonconvertible debentures with a coupon of 18-20 per cent and with a term of two-three years.

“We realise that digital propagation of our intent may bring forth better pipeline efficiency. So far intermediaries and direct contacts provided deals. With physical BD efforts being low, digital methods to source quality trades will be needed,” said Amit Goenka, CEO and MD at Nisus Finance Services.

Another lender Rattanindia Finance, a joint venture between Lone Star and Rattanindia, is reaching out to its existing builder relationships across the country by personally speaking and understanding their thought process and key areas where they need support currently, said Anchit Lakhotiya, head, real estate at Rattanindia Finance. “Additionally, we used social media to send a private message/link to industry connects for sharing opportunities they are evaluating and we can look at doing it solely or arrange for them or do it jointly with our peers or participate in a larger opportunity,” said Lakhotiya.