Undeterred by the ongoing global financial meltdown, private equity (PE) firm Red Fort Capital plans to invest Rs 3,200 crore by the next year to cash in on the liquidity crunch in the real estate sector.
“Since the financial crisis started last month, the number of proposals to us has increased by over 50 per cent; some of them are well-established, big developers,” Red Fort Capital Director Kuldip Chawlla said.
The impact of the global financial crisis became prominent, when foreign partners of developers started to back out, he added.
“As more lending curbs are in place, we have lots of opportunities now. We are in the process of closing a number of transactions in many cities. We are currently talking to about 10 developers in these cities,” Chawlla said.
The real estate-focused PE fund has planned to pump in Rs 3,200 crore in the next one year to pick up an average 50 per cent stake each in 10-12 projects located in equal number of cities, including the National Capital Region, Mumbai, Bangalore, Kolkata, Chennai, Pune and Hyderabad, he added.
Without divulging names of builders, he said three of them are “big national developers”, while the rest constitute local players. “These projects will primarily comprise residential, office spaces, budget hotels and warehousing and logistics spaces,” Chawlla said.
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The company would invest in affordable housing projects only, he said.
“We are looking for both IT and non-IT office spaces. We are also planning to invest in about 4-8 budget hotels in tier-I and tier-II cities,” he said.
On the warehousing and logistics front, Red Fort is scouting for projects in auto, retail and durables segments.
Earlier in July, the PE fund had joined hands with Godrej Properties to develop an IT park in Kolkata, where Red Fort Capital picked up a 49 per cent stake. The project – Godrej Genesis – is expected to generate sales of over Rs 750 crore.
Red Fort Capital is a global private equity firm with a focus on real estate investments in India. It has already committed to a number of residential and commercial projects worth over Rs 7,500 crore.