RMZ Corp to soar high with investment from Qatar Fund
External and internal Investment has always been the backbone of the Indian real estate. In what is considered to be one of the biggest investment deals for the Indian real estate, the Qatar’s sovereign wealth fund, QIA, has recently announced its USD 300 million investment in RMZ Corp.
RMZ Corp, the Bangalore-based real estate builder and one of the largest office space builder of South India, has already secured its position in the realty market by striking a deal with the Qatar Investment Authority. The deal is its nascent stage and the flow of money from QIA will be based on the requirements of the project.
According to market news, the deal will be a mix of debt and equity, split in equitable proportions, into an SPV (special purpose vehicle) housing the RMZ’s commercial projects in Bangalore that are under-development. The information cited by other sources further confirms that the Bangalore based developer, RMZ, has submitted a number of commercial project brochures, for the Qatari investors to come to a conclusion and form an opinion without a hitch.
Where RMZ projects are located
RMZ developed more than 13 million sq ft and called the shots for a property portfolio in excess of USD 3 billion in real estate across India. The company has left its presence in various cities of the nation namely-Mangalore, Kochi, Mysore, Nagpur and Coimbatore.
At present, RMZ has nearly 6.5 million sq ft built up commercial space across Chennai, Bangalore and Hyderabad. According to market sources, the real estate firm is also in talks to purchase an excess of 5 million sq ft in the southern cities of India, which is likely to yield fruitful results by the end of 2013.
Impact on real estate
The fund will find its utility in the SPV, RMZ’s special purpose vehicle, where Baring Private Equity Partners (a private equity group) have invested Rs 500 crore last year. Investment of the Qatar Investment Authority in SPV is likely to back RMZ to purchase IT parks valuing Rs 3000 crore in Bangalore. Both the partners, jointly, will aim to get their hands on acquiring commercial spaces across India, namely Hyderabad, Pune and Chennai.
Such a high investment by the QIA, is likely to boost the Indian real estate market significantly. The step taken by the Qatar Investment Authority towards Indian real estate market will encourage the pension and sovereign funds to invest in real estate projects of the nation and bid for higher return, by being at the helm of the projects.
The QIA investment in RMZ further gives impetus to foreign investments. Following the QIA investment, foreign groups like Abu Dhabi Investment Authority has appointed Kotak Realty fund to invest on its behalf. To add to it, investment of Oman’s State General Reserve Fund in HDFC property fund, will give an edge to the real estate market of the nation.
Headquartered in Doha, the QIA is designed to serve at the top-notch levels of global investing. With the introduction of Rs 1800 crore (USD 300 million) from QIA, the real estate market of India will be set on an escalating path. Consequently, the economy of the nation will witness a major boom and recover from its slumber pace. To add to it, it is the ideal time for foreign investors and NRI’s to invest in Indian real estate market and look for profitable returns in the future, since the value of rupee has depreciated.
