Brook­field in­vests $100mn in clutch of INCOR’s projects

In­vest­ment was made from man­age­ment’s eq­uity fund

Hindustan Times (Chandigarh) - Estates - - ESTATES - Mad­hurima Nandy bidya.s@htlive.com n

BEN­GALURU: Canada’s Brook­field As­set Man­age­ment Inc. has in­vested $100 mil­lion in a clutch of res­i­den­tial projects of Hy­der­abad-based real es­tate com­pany INCOR, at a time when many pri­vate eq­uity (PE) in­vestors have slowed the in­vest­ment pace in fi­nanc­ing res­i­den­tial projects in In­dia due to an over­all slow­down in the sec­tor.

The in­vest­ment was made from Brook­field’s $4.5 bil­lion global PE fund. It is a struc­tured in­vest­ment with an eq­uity up­side.

“Brook­field has done 11 trans­ac­tions in res­i­den­tial projects in In­dia so far, and now plans to scale up its in­vest­ments in this seg­ment, and aims to build a $1 bil­lion port­fo­lio in the res­i­den­tial sec­tor,” said a per­son fa­mil­iar with the firm’s plans but did not wish to be named.

Dev San­tani, head of res­i­den­tial fi­nanc­ing at Brook­field, de­clined to com­ment cit­ing com­pany pol­icy.

G. Anand Reddy, co-founder of INCOR, said the trans­ac­tion will help grow its port­fo­lio of projects at a faster pace while cre­at­ing more value for all stake­hold­ers, es­pe­cially cus­tomers.

BROOK­FIELD HAD PRE­VI­OUSLY IN­VESTED IN TWO INCOR PROJECTS BUT SUB­SE­QUENTLY EX­ITED BOTH OF THEM

“The trans­ac­tion is of a struc­tured eq­uity type and will be spread across mul­ti­ple projects, in­clud­ing ex­ist­ing projects in Hy­der­abad, to­tal­ing 6 mil­lion sq. ft and a soon-to-be-launched pro­ject in Kom­pally com­pris­ing about 1,100 apart­ments over 12 acres,” Reddy said.

He said a por­tion of the pro­ceeds would also be used to of­fer an exit to some of the ex­ist­ing in­vestors.

Be­fore the INCOR trans­ac­tion, Brook­field’s prom­i­nent res­i­den­tial deals in In­dia in­clude a ₹450 crore struc­tured debt in­vest­ment in Mum­baibased Penin­sula Land Ltd’s pre­mium pro­ject in By­culla and ₹800 crore in To­tal En­vi­ron­ment Build­ing Sys­tems Pvt. Ltd’s hous­ing projects in Ben­galuru, which was mainly to­wards re­fi­nanc­ing the de­vel­oper’s ex­ist­ing loans.

Brook­field had pre­vi­ously in­vested in two projects of INCOR but sub­se­quently ex­ited both of them.

In the last few years, Brook- field has rapidly risen as a top in­vestor in In­dia’s com­mer­cial of­fice space along side the likes of Black­stone Group LP and GIC Pte Ltd. Ear­lier this year, it con­cluded a ₹2,400 crore ac­qui­si­tion of Equinox Busi­ness Park, a com­mer­cial prop­erty of Es­sar Group in Mum­bai’s Ban­draKurla Com­plex. In 2016, it bought Hi­ranan­dani Group’s of­fice and re­tail space in subur­ban Mum­bai’s Powai for $1 bil­lion.

While many global in­vestors have chased good qual­ity of­fice projects in In­dia, not all have shown ad­e­quate in­ter­est in res­i­den­tial projects. Do­mes­tic PE funds have also stayed away from ag­gres­sively lend­ing to hous­ing sec­tor, which is dot­ted with slow sales and in­ven­tory pile-up, and started look­ing at in­vest­ments in of­fice space.

The prom­i­nent res­i­den­tial deal this year would be Ben­galuru-based de­vel­oper Pres­tige Group sign­ing a ₹2,500 crore res­i­den­tial joint ven­ture agree­ment with HDFC Cap­i­tal Ad­vi­sors Ltd to build a mid-in­come hous­ing plat­form.

PE in­flows in real es­tate rose 15% year-on-year to $2.6 bil­lion in the Jan­uary-March quar­ter, eclips­ing the first quar­ter of the past 11 years, said prop­erty con­sul­tant Cush­man and Wake­field.

MINT/FILE

Brook­field is a key in­vestor in In­dia’s com­mer­cial of­fice

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