KKR to invest Rs150 crore in Sunteck Realty’s residential projects in Mumbai
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Mumbai: Premium real estate developer Sunteck Realty Ltd on Tuesday said KKR and Co. Lp will invest around Rs.150 crore to fund its upcoming luxury residential projects in Mumbai’s Bandra Kurla Complex (BKC).
The Mumbai-based company said in a statement that it has signed a definitive agreement with the global investment firm, under which the latter would invest in Sunteck’s flagship residential projects Signia Isles and Signia Pearl.
The projects, with around 150 flats costing Rs.20 crore and above, are expected to be completed this year. The company said it has sold about 110 units so far and has gained interest from many industrialists, senior executives of leading financial services firms and corporations, apart from Bollywood personalities, because of its proximity to the business hub.
So far, Sunteck has invested around Rs.1,350 crore, including land and construction costs in the two projects. The investments have been funded through internal accruals and cash received from the sale of these flats.
“We are excited to enter into a relationship with an experienced global investor like KKR and attract this strategic investment,” said Kamal Khaitan, chairman and managing director, Sunteck Realty Ltd.
Khaitan said the company has grown with a good mix of debt and equity with a few exclusive partners in the past. Transaction with KKR will be the “initiation of a long term strategic partnership”, he added.
“KKR’s investment in Signia Isles and Signia Pearl is the beginning of our relationship with the group. We look forward to deepening our relationship with the group to explore more of these opportunities in the future,” said Sanjay Nayyar, chief executive officer, KKR India.
Last month, Sunteck Realty provided an exit worth Rs.270 crore to private equity firm Kotak Realty Fund from its investment in a mixed-use development project at Goregaon, a suburb in Mumbai. In 2012, the PE firm invested around Rs.150 crore during the acquisition of 16 acres of land for the project. Kotak exited from the project at an internal rate of return of approximately 22%, the company said.
“High-yielding debt solutions in a self-liquidating residential product is a competitive sector where a number of funds are competing to lend to tier 1 developers. Funds that will be successful in the medium to long term will be the ones who can come out with innovative solutions,” said Ramesh Nair, chief operating officer, JLL India, a global property consultant.