Element Capital to invest in low income housing
Element Capital, a real estate-focused private equity firm is in the process of launching a billion-dollar fund. They are planning to invest the amount in low-income housing, as it looks to take advantage of a revive property market.
According to fund manager, the Element value Housing Fund is expected to launch by this August, has received an amount of Rs 1,600 crore from pension funds, many high net-worth individuals and endowments.
The news comes at a time when the country’s dying residential property market is expected to see an uptrend in fortunes in 2013, because of the improved economic conditions.
According to real estate experts, currently the residential property market is doing quite well and in future it will be better than the commercial real estate market.
The fund is expecting to make investment of $100 million per project, and will look to stay invested for at least five years, with the option of one-two year extensions. The Fund Managers of Element Value Housing Fund, said that they will be creating special purpose vehicles for each project identified by them. Recent policy changes have given new hope to fund managers who have otherwise failed to deliver the promised double-digit returns to investors, even as the country’s economic growth continued to contract.
Last year, RBI allowed real estate players to avail external commercial borrowings for low-cost housing projects. State-owned HUDCO has announced an interest rate cut of 0.5%, which will see floating interest rates for housing schemes for the poor ranging between 8.50% and 8.75%. The availability of ECBs and HUDCO’s rate cut have come as a huge positive point, and they are looking to take advantage of this.
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commercial real estate market, Element value Housing Fund, HUDCO, low cost housing projects, Private equity firm, Residential property, Residential property market
