Hypo invests Rs 600cr in Shriram Properties

Hypo Real Estate Group, the German commercial real estate financing conglomerate, which manages billions of dollars of assets globally, is understood to have invested Rs 600 crore to finance three projects being executed by Bangalore-based Shriram Properties.

The management of Shriram Properties declined to comment.

Shriram Properties, the Rs 450-crore real estate arm of the Rs 25,000-crore diversified Shriram Group, which has business interests covering real estate, truck financing, insurance, consumer finance and information technology, employs over 15,000 people in its various verticals.

According to industry information, Hypo's infusion will be for commercial projects spread over 6 million square feet, predominantly in South India with a heavy focus on the Chennai market. However, it is not clear if Hypo has taken an equity exposure in these projects or channelled this as debt.

According to industry sources, the investment is the second one for Hypo in India after it took a Rs 380-crore exposure in Tanglin Development promoted by VG Siddhartha, who runs the Café Coffee Day chain.

Shriram Properties, in the recent past has been on a fund-raising spree and has raised around Rs 1,000 crore from US-based private equity players Walton Capital and Starwood Capital Group. In addition to investing substantially in an integrated township project being developed by Shriram in Kolkata, Walton and Starwood recently invested $100 million at the enterprise level in Shriram Properties.

The Kolkata project, estimated to cost Rs 5,000 crore, represents one of the largest-scale partnerings of global real estate private equity firms in India, will be on land previously belonging to the Hindustan Motors plant in Uttarpara, and will comprise approximately 20 million square feet of residential, retail, office and civic infrastructure.

Shriram Properties was founded in 1995, and over the past 12 years has built over 4.5 million square feet of residential and commercial space in Bangalore, Chennai, Coimbatore and Hyderabad.

The company has built a team of almost 300 people in five offices throughout India, and is developing a portfolio of 70 million square feet of space across India, including residential, office, retail, hotel and civic infrastructure.

The company after establishing a decent presence in South India is now looking to branch out to Northern and Western Indian markets.

Industry information further suggests that Shriram Properties is also gearing up for an initial public offer next year through which the company is expected to raise close to Rs 900 crore.