BackKotak Realty invests Rs320 crore in Chennai, Mumbai projects
Kotak Realty invests Rs240 crore in an under-construction shopping mall in Chennai and Rs80 crore in an ongoing office project in Mumbai from its $250 million offshore fund
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Bengaluru: Kotak Realty Fund, a part of Kotak Investment Advisors Ltd, has invested Rs240 crore in an under-construction shopping mall in Chennai and Rs80 crore in an ongoing office project in Mumbai from its $250 million offshore fund, said two people familiar with the transactions.
Both are debt financing deals and the funds will be used for construction.
In 2016, Kotak Realty Fund raised $250 million from offshore institutional investors to invest in both residential and commercial projects. Earlier, Kotak had raised a $392 million offshore fund in 2013-14 which included a commitment of around $200 million from sovereign wealth fund Abu Dhabi Investment Authority.
Thus far Kotak has raised a total of $1.47 billion in capital commitments and invested in 40 projects and companies across commercial office, residential, retail, industrial and hospitality sectors.
“Investment opportunities in real estate today are few and far between. Kotak is actively looking at deals but will only invest where it makes sense and offers value," one of the two people cited above said on condition of anonymity.
Kotak Realty Fund didn’t invest for close to 18 months or so, owing to the paucity of good quality deals. Like some other fund managers, it decided to wait and watch during a time when the real estate sector underwent its worst slowdown.
The upcoming mall on Chennai’s Old Mahabalipuram Road that Kotak has invested in has 540,000 sq. ft of leasable area and around 60% of the area has already been leased. The project also has a 126-room hotel and residences. Kotak has invested in the mall portion of the mixed-use project, which is being developed by OMR Mall Developers Pvt. Ltd, led by Allied Investments & Housing (P) Ltd and a clutch of landowners and investors.
“The structure of the mall is complete and significant amount of leasing has already been done. There is demand for mall space and ours will be the first mall of this size in this area," said Abdul Wadood, managing director, Allied Housing.
Kotak has also invested Rs80 crore in an under-construction office project, of around 250,000 sq. ft, on the Andheri-Kurla Road in Mumbai. It is being developed by a regional developer.
Kotak Realty Fund is also in the middle of raising a new $100 million affordable housing fund, which will invest in projects with homes costing below Rs35-40 lakh. Part of the target corpus has already been raised but the fund hasn’t started deploying the money.
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