Developers in India backed by PE funds for buying happiness in weak realty market

Q: Is this happiness is for a short time for the Indian property developers?

Kunal,

22nd July 2015

Real estate News in Mumbai

real estate news

pe funds

mahindra lifespaces developers

assetz property group

godrej properties ltd

weak realty market in india

global funds

brigade properties pvt ltd

puravankara projects ltd

standard chartered bank

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Replies (3)

Recently, Mahindra Lifespace Developers Ltd and SCM Real Estate Pvt. Ltd. of Singapore, the investment arm of Standard Chartered Bank, have made a joint venture agreement with a combined investment commitment of Rs.1000 crore to buy land and develop residential projects.

last month, Mahindra Lifespace announced its entry in Bengaluru with a residential project, which is also part of the investment partnership.

Parag Shukla, Bangalore

22nd July 2015

Comment

Good morning Bhuvan and Abhi,
Earlier this month we have seen that Mumbai's Godrej Properties Ltd and Dutch pension services provider APG, through their Rs.770 crore joint investment and development venture, bought 18 acres from Puravankara Projects Ltd in Bengaluru. One thing which i would like to mention here that only those land parcels are seeing a lot of interest by the PE fund that involve clean-titled and well-located.

Milind, Bangalore

22nd July 2015

Comment

It's true Milind,
In June, Bengaluru based Brigade Properties Pvt. Ltd. entered into a joint venture with Singapore's sovereign wealth fund GIC Pte. Ltd. it is buying a 15.8 acre plot in Chennai's Perungudi area for Rs.550 crore from Kansai Nerolac Paints Ltd.

At the same time, most of the firms now want a competitive bidding process while selling their land, almost like a merger and acquisition deal, to improve transparency. But this also drives up the price.

Vikash V, Ahmedabad

22nd July 2015

Brigade-Kansai Nerolac deal is the best example for that where the developer has paid a sizeable premium in Chennai, a city where residential sales have been really slow. The firm is looking to buy more land in Hyderabad and Chennai but one has to be careful as Brigade is sitting on a war chest.

Bhuvan, Delhi-NCR

22nd July 2015

Well friends....
Since there are not too many developers buying land today, and not all have private equity support, it is a good time to be in the market to acquire land.

While there is not much competition in terms of potential buyers, land prices are quite competitive keeping in mind that there are not too many good ones in the market.

Milind, Bangalore

22nd July 2015

I don't think so. Because many land purchases are likely to take place via partnerships between developers and fund houses and it is a good news for the market. PE funds-backed developers set for buying spree in weak realty market Large pieces of land have been put up for sale in top property markets such as Mumbai, Bengaluru and the National Capital Region by companies, private land owners, and some developers seeking to monetize their assets

Abhinandsavalla, Mumbai

22nd July 2015

Comment

@Abhi,
I am not denying what you have said but only good quality assets among them are getting attention. This year has seen only 2 such transactions and it is said that several more are in the queue. It happens only because of global funds have committed to fund more capital to Indian real estate.

Bhuvan, Delhi-NCR

22nd July 2015