Altico Capital invests over INR 550crs in the Bangalore Residential Market
Altico Capital, the non-banking finance company, promoted by Clearwater Capital (now Fiera Capital), Abu Dhabi Investment Council and Varde Partners, has recently invested INR 120crs in affordable plotting projects with the Century Group, in Bangalore. This is Altico’s second investment with the Century after initially co-investing INR 765crs with Piramal in a portfolio of projects in 2015.
The new investment will be towards a recently launched plotting project in North Bangalore by the name of Century Greens wherein Century is developing plots in range of INR 25 – 50 lakhs category. “We are delighted to partner again with a strong group like Century with whom we have a history of successful exits. The new investment is against an ongoing plotting project which fits into our philosophy of investing in affordable and mid market projects of ticket sizes below INR 50 lakhs” said Sanjay Grewal, CEO of Altico Capital.
With higher launches in the affordable segment and attempts by developers to reduce ticket sizes to attract a wider spectrum of homebuyers, average apartment sizes have shrunk over the past couple of years. Residential launches and sales both having bottomed out in 2017, Bengaluru’s residential market witnessed a remarkable comeback in H1 2018 on both parameters. Bengaluru saw new launches of approx. 15,500 units in H1 2018 (up 11% YOY) and sales of approx. 25,800 units in H1 2018 (up 22% YOY).
Altico recently also sanctioned a facility of INR 450 Crs across 5 transactions thereby underwriting a total saleable area of 6.3 million square feet. Of the 5 projects, 1 project is brownfield and the rest are greenfield mid income and affordable residential projects spread across various locations in the north, northeast and Whitefield area. “We are very pleased to be associated with Assetz, an institutionally backed, professionally managed firm led by Ben Solomon which has a solid track record of over 10 years spread across all RE asset classes including Residential, Commercial, Warehousing and Logistics having delivered over 6-7mm sft” mentioned Grewal.
Bangalore continues to be a robust residential market as well enjoys the highest office space absorption amongst all major Indian cities. Bengaluru witnessed gross leasing activity of approx. 12 mnsq ft during Jan-Sep 2018 and new completions of approx. 9 mnsft during the same period. Given the strength of the Bangalore market, Sanjay Grewal added that Altico would certainly look to scale up its exposure to the RE sector here which currently stands at 12% of the overall assets under management.