BANGALORE/MUMBAI: Global investors are once again warming up to India's real estate and have raised nearly $2 billion (Rs 11,854 crore) in the past year despite the economic uncertainties and the scepticism surrounding this sector.
Some of the large investments include Abu Dhabi Investment Authority (ADIA) backing Kotak Realty fund, and Sovereign Fund of Oman investing in HDFC. Additionally, Aditya Birla Real Estate Fund, Redfort Capital and JPMorgan are some of the funds that have raised money recently to invest in real estate projects.
On Monday, Kotak Real Estate fund said it had raised $200 million (Rs 1,200 crore) from select group of investors and has firmed commitments to raise $200 million more to close its $400 million (Rs 2,400 crore) eight-year tenure fund to invest in only residential properties in India's six metros. Kotak group has invested around $30 million as sponsors.
"The investor base has consolidated and the nature of investors has undergone a sea change,'' S Sriniwasan, chief executive Kotak Real Estate Fund said. "Today, only long-term investors like large government funds and pension funds are keen on investing in India." He declined to name the investors as it is confidential.
"The transaction size can be large in metros and another benefit of investing in metros is that there is liquidity in these centres as against small cities," Sriniwasan said. The fund had so far raised $1 billion from overseas markets, invested in 32 properties and returned $380 million from six exits with a 23% return. According to Sriniwasan, it is very challenging in today's market to raise capital since investors or LPs are looking at continuity and consistency in management.