LIC realty fund eyes office opportunities
Many deal opportunities that are coming to us, both from IT (information technology)-backed office projects as well as from warehousing, fuelled by the growth of e-commerce today, said A.K. Sharma, chief executive of the fund
Mar 23, 2015
Source : Livemint


Bengaluru: Having deployed a significant portion of its `529-crore real estate fund in residential projects in Bengaluru, Pune and Chennai, LICHFL Asset Management Co. Ltd (LICHFL AMC) is planning to invest the balance in commercial space and warehouse projects, the fund’s chief executive said.

LICHFL AMC—the private equity arm of LIC Housing Finance Ltd—had raised its maiden real estate fund called LICHFL Urban Development Fund in 2013 with a focus on mid-income residential projects.

“There are many deal opportunities that are coming to us, both from IT (information technology)-backed office projects as well as from warehousing, fuelled by the growth of e-commerce today,” said A.K. Sharma, chief executive of the fund.

According to Sharma, investment opportunities have piled up as many projects are stuck and waiting for completion. In many cases, the developers have finished construction but don’t have money for infrastructure work on water treatment, waste disposal or approach roads.

“We are looking at such deals related to project infrastructure. For IT office park deals, we are looking at cities such as Bengaluru and Pune, where we could buy a single asset or even look at a joint development deal,” he said.

LICHFL AMC is also thinking of a second real estate fund, with a probably bigger corpus, said Sharma, without disclosing details.

The real estate sector has faced a slowdown in the last two years or so. While home sales are yet to pick up, private equity (PE) investors have actively engaged in funding commercial office projects. “The positive outlook for the Indian market this year includes an increasing demand for IT/back-office space, the emergence of new sectors such as e-commerce as well as the rising demand for SEZ (special economic zone) space,” said Anshuman Magazine, chairman and managing director at property advisory CBRE South Asia Pvt. Ltd. “Other silver linings for 2015 are the likely commencement of REIT (real estate investment trust)-led investments in India’s commercial real estate, new workplace strategies and rising rents in supply-deficient core markets.”

“Most PEs have a clear investment strategy, where they either look at office space projects that are typically longer in tenure and without much exit pressure, or they invest in residential projects which are more fragmented and there is construction risk involved,” said Shashank Jain, partner, transaction services at PricewaterhouseCoopers India.

“These are two different asset classes, and while the bigger funds look at the large office deals, there are many new fund managers who do smaller residential deals,” said Jain.

Latest Realty News

Mar 23, 2015
Accra (Ghana) : A recent upsurge in infrastructural developments across Africa might well turn out to be a boon for Indian companies
Mar 21, 2015
BENGALURU: The district revenue officials have cleared 20 acres of government land worth Rs 678 crore encroached by various parties
Mar 21, 2015
MUMBAI: A fresh proposal by leader of the house Trishna Vishwasrao (Shiv Sena) at the civic general body meeting on Friday that properties below 500 sq ft be excluded from the capital value-based property tax system
Mar 21, 2015
Ranchi: Several high-rise buildings in Adityapur, including three on the Tata-Kandra artery, are under Jharkhand High Court scanner for alleged unauthorised use of Jharkhand State Housing Board land
Mar 21, 2015
New Delhi: The ambitious plan of Nitin Gadkari, Union minister for road transport, highways & shipping, to develop a smart city around major ports is likely to start with Kandla port
Mar 21, 2015
New Delhi: The Narendra Modi government, under pressure from within the Bharatiya Janata Party (BJP) as also from opposition parties, could allow the contentious land acquisition ordinance to lapse
Mar 21, 2015
Mumbai: The hiking of the floor space index (FSI) in suburbs and the linking of its premium to market rates, steps taken by Maharashtra government to bring down the rates of the transfer of development rights (TDR), have dampened the realty market
Mar 21, 2015
Kolkata: Credai Bengal in association with The Telegraph has organized the 2nd Edition of the CREDAI Bengal Realty Awards 2015 on 19th March 2015 at The ITC Sonar, Kolkata, where winners across 14 categories were chosen,000-houses-by-year-end
Mar 21, 2015
Mumbai: India’s leading real estate developer XRBIA Developers recently announced the beginning of early possession of 1,000 apartments
Mar 20, 2015
Margao: Margao municipal council (MMC) launched a single window system for processing construction licenses for new building projects

Latest Realty News Of State

Realty Talk's