BENGALURU: Asian infra investor Equis Funds Group has invested Rs 720 crore or $116 million in property developer Assetz, which plans to build a string of mid-income housing townships in the country over the next five years.
Bengaluru-based Assetz plans to develop mid income housing of around 20 million sqft and the funds will be deployed for building captive infrastructure for these large township projects. The investment by Singapore domiciled Equis, which manages assets worth over $2.7 billion in infrastructure and real estate sectors, is among the biggest private equity deals to chase the India's housing market in recent years.
India's residential developers are likely to shift focus on to middle class housing as the world's fastest growing economy also carries with it one of the fastest urbanizing population. The Narendra Modi led National Democratic Alliance plans to boost the supply of affordable urban dwellings, which is running short of 19 million units currently
Prime Minister Modi's much talked about election promises include housing for all by the year 2022.
"Our strategic alliance with Assetz will enable us to address some of the challenges of providing infrastructure for accommodating middle class housing for the urbanizing population in the fast growing and rapidly transforming Indian environment," Equis Funds Group CEO, David Russell said.
Assetz over the next five years plans to deliver 20,000 residential units costing between Rs 28 lakh and Rs 40 lakh, giving the company revenue in excess of $1 billion or above Rs 6,000 crore. These townships will be built on 20 acre plus land parcels with captive civic amenities such as schools, aged care facilities, health centers, public amenities, localized shopping centers and recreation centers.
Several Indian developers like Tata Housing have dabbled in affordable housing with mixed results. Some have pulled back even as the economy and the housing market went into a prolonged bearish mode. But a recovering economy and a fresh investment impetus are prompting the developers for a renewed [push into middle class — if not bottom of the pyramid — housing.
In context, the Equis deal is significant as it signals foreign capital flow into residential market once again. Six months back, Singapore's Sovereign wealth fund GIC and southern developer Brigade Group committed to equally invest Rs 1,500 crore in a bid to develop a slew of residential projects in the country.
Recent years have seen top dollar investments chasing rental yielding commercial assets, with global investors like Blackstone Group, Brookfield Asset Management and GIC having bought such assets in the country worth over $2.5 billion last calendar.