Bengaluru: Real estate developer Prestige Group is set to acquire 66.66% stake from private equity partner Red Fort Capital and land owners in group company Prestige Projects Pvt. Ltd for Rs324 crore.
Prestige already owns 33.34% in Prestige Projects, which has a 180-acre land parcel near Sarjapur Road in Bengaluru.
Prestige Group now intends to develop a large-scale affordable and mid-income housing project comprising apartments, villas and plots on the plot.
With this, Red Fort Capital exits its investment made in 2010-11.
“This transaction will help us enter the affordable housing segment in a big way. The proposed project has significant potential to grow our profitable revenue base and further strengthen our market share in the micro-market," said Irfan Razack, chairman and managing director, Prestige Group.
Prestige will be building apartments at an entry price of Rs35-40 lakh, primarily in the mid-income segment.
In 2015, Prestige bought Red Fort India Real Estate Holdco Llc, an information technology park and a villa project in Bengaluru. Red Fort had invested about Rs280 crore in the two assets—in Exora Business Parks in 2007 and in the villa project in 2010.
After these two exits, Red Fort had remained invested only in the proposed project on Sarjapur Road.
Red Fort Capital has invested around $1 billion in equity capital across various residential and commercial real estate projects in India.
The asset management firm has been steadily exiting its investments from these projects following a separation between Red Fort Capital co-founders Subhash Bedi and Parry Singh in 2015. Bedi went on to set up his asset management firm Rising Straits Capital and also manages the investments made by Red Fort Capital and the exits. Bedi didn’t respond to an email query on Tuesday.
The transaction fits well with the company’s strategy of entering the affordable housing segment, which has huge demand and potential for growth, said Venkat K. Narayana, chief executive, Prestige Group.
“The total developable area of the project will be around 7.5 million sq. ft and we estimate top line revenue potential of over Rs3,500 crore from this development," Narayana said.