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BENGALURU : Walton Street BlackSoil Real Estate Debt Fund II (WSBREDF-II) has closed two transactions, and deployed Rs110 crore of debt in two housing projects, in Chennai and Hyderabad.

The fund has deployed Rs65 crore in Krishnaiah Projects ‘Zion’ in Chennai and Rs45 crore in Jain Housing Constructions Ltd’s project ‘Salzburg’ in Hyderabad. Both projects are in the mid-income housing segment.

In September, WaltonStreet BlackSoil Real Estate Debt Fund II said it has made a first close of Rs360 crore and will offer debt financing to largely mid-income, residential projects in the top six cities.

The fund has a target corpus of Rs500 crore, with a green-shoe option of Rs250 crore. Domestic high-networth individuals (HNIs) and family offices have invested in the fund, which will be fully raised by December. The debt fund is registered with the Securities and Exchange Board of India (Sebi) as a Category II Alternative Investment Fund (AIF).

Both the transactions are in line with WSBREDF-II’s plan to pursue residential structured debt investments in projects with developers that focus on execution and delivery.

The fund will also target six to eight more investments in Hyderabad, Bengaluru, Chennai, Pune, Mumbai and National Capital Region.

The company said the deals are expected to provide debt capital support to developers and make consistent cash flow available to them to facilitate the timely completion of existing projects.

Zion, being developed by Krishnaiah Projects in Chennai, is part of the last phase of a township comprising 1,800 families. ‘Salzburg’ by Jain Housing has an affordable price point and a good sales track record. Both projects enjoyed substantial existing sales at the time of entry.

“The mid-income housing segment has shown great promise. In the last one year, the segment has gained prominence and has led the share of new launches. Gradual pickup in sales volume has been witnessed in this market segment following the recent relaxations in the lockdowns and other factors such as higher absorption than supply, improved affordability, and favorable government policies," said Vimal Jangla, Managing Partner at Walton Street India.

“The focus of our second fund is to provide financing to developers with proven track records of execution across the mid-income housing sector in our key markets driven by end-user demand, to invest in key in-fill projects with full control over cash flow and visibility on financial closure and completion," Jangla added.

Since 2013, and prior to the launch of WSBREDF-II, Walton Street India and BlackSoil have jointly placed over 1,500 crores of debt capital across fifty real estate transactions.

Recently, BlackSoil and the former India-based management team of Walton Street Capital, L.L.C. acquired Walton Street India’s real estate debt business. The India management team is led by Kaushik Desai, Vinit Prabhugaonkar and Jangla. As a result of the buyout, Walton Street India is no longer affiliated with Walton Street Capital, L.L.C.

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