Ask Group to Invest in Mid-Segment Housing
The Fiscal Year of 2015 is to be a promising one, as the hungry real estate market is finally going to be fed with fresh private equity (PE) investments worth Rs 10,000 to 15,000 crore. The interest to invest in real estate has been fluctuating, as in 2011, private equity investment was Rs 20,000 crore and this fell to a measly Rs 3,000 to 4,000 crore in 2014. Liases Foras Chief Executive Officer Pankaj Kapoor and Ask Group’s Managing Director Sunil Rohokale both feel that the mid and affordable segment are going to be the most profitable areas for investment in 2015.
Most private equity firms are cautious about investing in real estate due to the low returns received in the previous investment cycle. However, as the government has shifted focus to develop the affordable housing sector, more firms are willing to experiment with the mid and affordable sector because these areas have a lot of potential scope. As a result of these changes, the diversified financial service Ask Group, plans on investing Rs 500 crore in mid-segment residential projects next year.
The Singapore-based subsidiary of this group, known as Ask Capital Management, is responsible for managing the offshore fund, out of which an amount of Rs 127 crore was recently invested for the third time in ATS Group’s project in Noida. Rohokale goes on to add that the project is currently being undertaken on 2,000 acres of land, valued at Rs 1,000 crore, and has a total saleable area of 1.7 million square feet. The project, which will be completed in three to four years, primarily targets mid-income housing.
The combination of the focus on mid-segment residential real estate project investments, along with impressive developers leads to an accumulation of high dividends that is gained by the investors. The first domestic fund launched in 2009 by this group, brought with it very successful internal rates of return (IRR) of 54% and 30% by exiting ATS in 2012 and Liviano, a project by Darode Jog Properties respectively.
Ask Group has raised two domestic funds, along with one offshore fund worth close to Rs 1,600 crore and Rs 500 crore for structured debt. Earlier this year, the $200 million offshore fund has already announced its first close of $50 million and will hopefully achieve the target of $150 million in the next 12 months.
Shriram Properties recently raised Rs 463 crore from Tata Capital and plans to raise Rs 400 to 500 crore more for fresh investment in mid-segment residential properties. Metropolitan cities such as Chennai, Bangalore, Hyderabad and Kolkata as well as non-metros such as Coimbatore and Vishakapatnam are to benefit from the total of 50m square feet that Shriram Properties currently has under development.
Source: Financial Chronicle
ASK group, ASK Group Real Estate Funds, ATS Group Noida project, business and finance, Economy, Infrastructure and construction, Mid-Segment Housing, Private Equity, real estate assets
