Hous­ing.com, China's Fo­sun in talks over $100 mil­lion in­vest­ment

The Pak Banker - - COMPANIES/BOSS -

Fo­sun In­ter­na­tional Ltd, the in­vest­ment arm of China's big­gest closely held con­glom­er­ate, is in ini­tial talks to in­vest about $100 mil­lion in Lo­con So­lu­tions Pvt. Ltd, the owner of prop­erty web­site Hous­ing.com, ac­cord­ing to two peo­ple fa­mil­iar with the ne­go­ti­a­tions.

Fo­sun group has ap­proached Hous­ing.com through its in­vest­ment arm, con­firmed the two peo­ple. One of them said that Hous­ing.com is on the road to raise another round of fund­ing and this pro­posal could be con­sid­ered as part of that fund rais­ing. "Rahul Ya­dav, chief ex­ec­u­tive of­fi­cer, had a meet­ing with Fo­sun Group man­age­ment in the last week of May and the dis­cus­sions are still at ini­tial stages," said the first per­son cited above.

"If the deal goes through, it should help Hous­ing.com to en­ter a new line of busi­ness. Over the last cou­ple of months, Hous­ing has been work­ing with a few real es­tate de­vel­op­ers to sell them pre­designed build­ings which can then be sold on Hous­ing.com," he added.

There are about 20,000 real es­tate de­vel­op­ers in the coun­try and most of them do ev­ery­thing in-house from de­sign and con­struc­tion to sales and mar­ket­ing. Hous­ing.com plans to work with these de­vel­op­ers to sell them stan­dard pre­designed houses, de­signed by re­puted houses. These houses will then be mar­keted and sold on Hous­ing.com.

Hous­ing.com de­clined to com­ment. An email sent to the Fo­sun group on Fri­day was not an­swered. "If Fo­sun is in­ter­ested in Hous­ing.com, then it is an in­di­ca­tor that com­pa­nies are see­ing po­ten­tial in in­te­grat­ing bricks and clicks in the longer run," said Ramesh Nair, chief op­er­at­ing of­fi­cer, Jones Lang LaSalle (JLL) In­dia. Even though such a model is dif­fi­cult to im­ple­ment, given the com­plex­i­ties in­volved in the real es­tate sec­tor in In­dia, con­sul­tants say that online en­quiries can be a use­ful source of in­for­ma­tion for de­vel­op­ers.

"The online plat­form can be used as a tool by real es­tate de­vel­op­ers to know the pulse of the buy­ers. The re­quire­ment of the buy­ers can be as­sessed through the data of online plat­forms, which can then be used by de­vel­op­ers to plan projects," said San­jay Dutt, ex­ec­u­tive man­ag­ing di­rec­tor, South Asia at Cush­man and Wake­field. Dutt added that in­ter­est in In­dia in­vest­ments from Chi­nese in­vestors is not sur­pris­ing given the slow­down in the Chi­nese econ­omy and the coun­try's plans to re­bal­ance their econ­omy to­wards con­sump­tion.

"Chi­nese

in­vestors want

to

in­vest more than 50% of their fu­ture in­vest­ments out­side the coun­try. Be­sides the US and Europe, they are keen for in­vest­ments in In­dia in back­drop of re­vived econ­omy," he said. Shang­hai-based Fo­sun group is a $10-bil­lion con­glom­er­ate which, among other busi­nesses, also has a con­struc­tion busi­ness and a real es­tate in­vest­ment busi­ness in China. Fo­sun Prop­erty Hold­ings, the prop­erty in­vest­ment and man­age­ment plat­form of Fo­sun Group, has an ex­po­sure in 26 cities across China with as­sets un­der man­age­ment at ren­minbi 140 bil­lion ($22 bil­lion), ac­cord­ing to its web­site.

For Hous­ing.com, this will be the fifth round of in­sti­tu­tional fund rais­ing. In De­cem­ber 2014, par­ent firm Lo­con So­lu­tions had raised about $88 mil­lion from a clutch of in­vestors, in­clud­ing Qual­comm Ven­tures, Nexus Ven­ture Part­ners, DST Global Lp, Fal­con Edge Cap­i­tal Lp, Soft­Bank Cor­po­rate, Dig­i­tal Nir­vana Fund Co. Ltd and He­lion Ven­ture Part­ners III Llc. Till date, Hous­ing.com has raised about $120 mil­lion across four rounds. Since dis­cus­sions are at an early stage, the val­u­a­tion at which the pro­posed fund­ing will be raised could not be as­cer­tained. Ac­cord­ing to a 17 De­cem­ber re­port in The Times of In­dia, the fund­ing round closed in De­cem­ber val­ued Hous­ing.com at around $250 mil­lion (Rs.1,550 crore).

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