Rupee denominated PE funds key to residential real estate
The woes of the real estate sector
are far from over. It will continue to get most of its private equity
(PE) funding from funds specifically focused on real estate, especially
in residential segment. Sector agnostic private equity funds will invest
in residential real estate with caution. Jones Lang LaSalle
India's Segregated Funds Group closed its first real estate fund in
India - Residential Opportunities Fund-I (ROF-I) - at Rs 160.75 Crore.
Like most real estate focused funds, Scheme ROF-I too is registered with
SEBI under the new Alternate Investment Funds (AIF) regulations. The
fund's focus is to invest in small residential projects in prominent
locations across seven - Delhi NCR, Mumbai Metropolitan Region,
Bengaluru, Chennai, Kolkata, Hyderabad and Pune. The last 10 to 12
months have seen a majority of rupee denominated funds, especially in
real estate. Fund raising in foreign markets has been muted. The
new AIF regulations raise the minimum investment amount to Rs 1 crore
from the earlier limit of Rs 5 lakh, this will clearly be the
differentiator between retail and long term investors. There will
be more of sophisticated investors and specialised investment themes in
the days ahead. The themes will be closer to what an investor wants -
capital appreciation, liquidity and due market diligence will be
paramount. There will be considerable interest in smaller projects.
Investment themes will follow the investor's strategy to generate
quicker and regular returns.
Source : WEB
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