69 Percent Rise in Private Equity Investments

69 Percent Rise in Private Equity Investments

By siliconindia   |   Thursday, January 12, 2012

Bangalore: According to a research company, Venture Intelligence, private-equity firms’ investment on India’s real estate property has increased by 69 percent in last year, reports Pooja Thakur of Bloomberg.

Private equity made $2.68 billion of real-estate investments through 53 transactions in the country, Chennai, India-based Venture Intelligence said in an e-mailed statement to Bloomberg.

Since developers are facing problems to carry out their projects due to less home sales, limited funds, high construction cost and stringent policies of banks and other finance companies that have put restrictions on their funding, Indian developers are now going after private-equity firms to fulfill their funding needs for their projects.

According to Venture Intelligence report, Jeff Morgan Capital has invested $320 million in Compact Disc India’s (CDI) film city project, which is one of the biggest investments last year followed by Warburg Pincus LLC along with Lemon Tree Hotels in a joint venture made the second largest investment of 14 billion Rupees in residential sector and Blackstone Group LP, invested $200 million in Bangalore’s Manyata Embassy Business Park. Residential projects have scored 57 percent transactions in 2011 followed by commercial real estate projects which came up to 19 percent.

All together, last year the private-equity firms have made 69 investments out of which 53 came into effect whereas 55 deals out of 63 were released to the public in the previous year.

As per Venture Intelligence, 19 real estate private equity firms quit the market in 2011 compared to 8 in 2010. Out of 19 about 14 of these private equity firms were to fund $603 million. Kotak Realty Fund sold out its stake to Tata Realty Initiatives Fund for $86 million in an IT Park in Mumbai’s Goregaon area followed by HDFC Property Ventures which has sold out its stake to Embassy Property Developments located in information Technology Park in Bangalore. HDFC also separated from its two years of investment with Nitesh Estate Bangalore for 4.5 billion rupees.

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