Shriram Properties to raise 300 cr PE funds
Bangalore- Shriram Group’s real estate arm, Shriram Properties, is planning to raise fund of Rs 300 crore from private equity firms for specific projects.
ASK Property Investment Advisors has recently funded Rs 100 crore to Shriram. But the realtor has said that it is looking to raise more funds. Shriram currently has a huge land bank of 1,000 acres. The firm has no debts as of now and raising debt is an option.
The developer has bought land parcels from Citigroup, in prime locations of Bangalore and Hyderabad, for Rs 101 crore using the fund obtained by ASK Property. Shriram has planned to develop residential projects in Bangalore and Hyderabad catering to the upper middle-income group of people in which ASK Property will be its co-developer.
The Bangalore-based realtor said that it has been negotiating land parcels worth Rs 600 crore in Bangalore, for which it will raise Rs 200-300 crore and the remaining will be raised by private equity investors.
Shriram is being supported by funds like Sun Apollo, Walson Street, ICICI, TPG and other investors. The developer is planning to dilute stake in individual projects. PE firms which have invested around $200 million at various stages of projects hold 40 percent of the stake.
The developer has planned to build around 70 million sq ft in the coming five to seven years including 4.2 million sq ft of commercial space and the remaining 65.8 million sq ft of residential space. These projects are estimated to cost Rs 25,000 crore.
According to a recent report by a realty consultant, the PE investments in the real estate sector have sloped down during the current calendar year. The sector has received Rs 3,500 crore which is around 15 percent less than the same period last year.
Over the years, majority of the investments were attracted by the three prime metropolitan areas of Mumbai, Bangalore and the National Capital Region. But their share has reduced to 78 percent in the first three quarters of 2012 from 84 percent in the same period of 2011. Pune, Hyderabad and Chennai cities have observed steady interest from PE investors.
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