Mumbai: Brick Eagle Capital Advisory LLP, a financial services platform that funds and advises low-cost housing developers, may raise as much as Rs700 crore to invest in affordable housing projects across the country.
The category II Alternate Investment Fund (AIF) was registered with the market regulator Securities and Exchange Board of India (Sebi) last week, according to top management.
The Rs500 crore category II Alternate Investment Fund (AIF) will carry a green-shoe option of raising an additional Rs200 crore, provided there is sufficient demand.
This fund will invest in affordable housing projects of local developers that serve the low income groups.
A pipeline of Rs200 crore has already been identified in Maharashtra, Gujarat, Tamil Nadu and Rajasthan.
“Affordable housing is a $2 trillion sunrise industry. We believe housing shortage in India is primarily an urban challenge; hence, our investments will be targeted in the top 20 cities and their suburbs,’’ said Kirti Timmanagoudar, a partner at Brick Eagle.
Brick Eagle has invested over Rs400 crore in projects spread across 1,000 acres.
India has demand for five million homes in the affordable segment annually.
The current supply is around 100,000 units.
“Over 90% of affordable housing supply from non-government sources is from local developers. Unfortunately, these local developers are unable to scale up due to paucity of quality capital and lack of professional management. To meet the supply-demand mismatch, it is necessary to support local developers. The local developers would be the only hope to deliver on the government’s mandate on ‘Housing for all by 2022’,” Timmanagoudar said.
Last year, Brick Eagle made two acquisitions in the affordable housing sector.
In March 2015, it acquired TMC (Tanaji Malusare City), a 105-acre township project in Karjat, Mumbai, for an undisclosed amount. In February last year, Brick Eagle picked up a 49% stake in Gujarat-based affordable housing developer, DBS Affordable Home Strategy Ltd for an undisclosed amount.
Based in Hong Kong, Brick Eagle Group has projects spread across 1,000 acres in the Mumbai Metropolitan Region, Pune, Chennai, Coimbatore, Mysuru, Vadodara and Ahmedabad. Brick Eagle has also incubated property developers, including Sheltrex which develops affordable housing-intensive townships.