Property funds eye bigger cities
Lack of investment opportunities in Tier-II and -III cities and higher return possibilities in large ones is forcing real estate focused PE companies to look at bigger cities for investment. Around $14 billion has been invested in about 700 transactions with around 300 developers across 33 cities in India, according to estimates.
Delhi-based Red Fort Capital, for example, is focusing only on Mumbai and the national capital region markets. Earlier, it had investments in six cities. Subhash Bedi, co-founder and managing director of Red Fort Capital explains that there are more opportunities in bigger cities. In the past two years, prime land in Mumbai has appreciated 35.2 per cent and NCR and Bangalore have seen 24.9 per cent and 26.1 per cent increase, respectively, over the same period.
HDFC Property Fund, sources tell, is now focusing the top six or seven cities. It had earlier invested in cities such as Coimbatore and Mysore.
Amit Bhagat, managing director and CEO at ASK Property Investment Advisors explains that small cities such as Nagpur, Jaipur, Mohali and Chandigarh were more of an investment destination than user destination.
Ajay Piramal group-owned Piramal Fund Management has investments in five cities such as Mumbai, Bangalore, the NCR and so on and planning to have the same number in its portfolio. Khushru Jijina, managing director, Piramal Fund Management points out that opportunity are ample within these target cities so the need to go to a sixth city does not arise for the moment. Global investor Xander is focused on top 10 cities in its retail portfolio and top five to six cities for investments in office properties and its debt platform. However, for However, for industrial assets, hotels and resorts, toll roads, or specialized usages, the company could look at wider range of opportunities.
Source: Business Standard
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