India’s new real estate funds eye stressed assets, affordable housing
Many new real estate funds are eyeing stressed assets and mid-income or affordable housing projects as the underlying theme for their investments. Private equity inflows in real estate rose 15% year-on-year to $2.6 billion in the January-March quarter, eclipsing the first quarter of the past 11 years, said property consultancy Cushman and Wakefield. The residential sector gained prominence with the highest inflows in 10 quarters, as investors looked to gain from government incentives in affordable housing. In the March quarter, private equity inflows into the residential sector in India more than doubled to $1.32 billion. Mumbai accounted for around 19% of the total deals.
ASK Property Investment Advisors has raised the ₹900 crore ASK Real Estate Special Situations Fund, which aims to reinvigorate housing projects that have witnessed slow sales, or do not have the finances to complete the project on time. ASK’s special situations fund comes at a time when residential developers are grappling with limited cash flows due to slow sales, besides experiencing problems with servicing debt.
HDFC Capital Advisors Ltd, which raised $550 million in the first close of its second affordable housing fund, HDFC Capital Affordable Real Estate Fund-2, formed an affordable housing platform with Prestige Estates Projects Ltd earlier this year, to jointly invest ₹2,500 crore in low- and mid-income housing projects.