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Realty developer Puravankara Group and private equity firm ASK Investment Advisors have acquired a land parcel here for the former’s affordable housing arm ‘Provident’.
The acquisition cost of the land was Rs 110 crore, and 75 per cent of it would come from ASK Investment, with the rest from Provident.
Puravankara is targeting 25-26 per cent return-on-investment from the project.
A special purpose vehicle — Purva Good Earth Properties Ltd — has been floated to acquire the land and develop the estimated Rs 820-crore project at Poonamalle near here. ASK Investment has made its part of the investment through optional convertible debentures.
Ashish Puravankara, joint managing director, Puravankara Projects Ltd, said it was the first private equity partnership for them, and going forward, the company would continue to raise money from PEs, will enter into JVs and other models.
“The deal is the culmination of the long-term partnerships with our investors and demonstrates their confidence in the group. The foundational aspect of the partnership has been the alignment of interests and meeting of synergies, with a strong focus on value creation,” he said.
Provident would soon enter the Hyderabad market and is considering launching projects in cities, including Mumbai and Pune, where its parent company has a strong presence.
“In the event of default, it (the investment) could be converted into equity,” said Purvankara.
This is the first time the real estate firm has roped in a PE player to meet its growth objectives, strengthen its balance sheet and its leadership position, he said.
“PE investments will also allow the Group’s ability to expand its geographic reach, enhance service offerings and grow the business in support of customer needs,” he said.
The company has acquired around 31.69 acre in the Poonamalle area with a potential to develop 3.3 million sft. The project will be developed under ‘Provident’ brand in three phases. It is expected to be launched with all statutory approvals by the end of the current financial year, and is would be completed within five years.
With an average selling price of Rs 4,500 for every sft, the project is expected to generate Rs 1,500 crore revenues. “We are hoping the project would generate a return of 25 per cent,” he said, adding it could generate cash of Rs 450 crore as pre-tax.
The Poonamalle micro market addresses the housing requirement of the industrial and manufacturing hub near Sriperumbudur, Oragadam and other locations.
The acquisition cost of the land was Rs 110 crore, and 75 per cent of it would come from ASK Investment, with the rest from Provident.
Puravankara is targeting 25-26 per cent return-on-investment from the project.
A special purpose vehicle — Purva Good Earth Properties Ltd — has been floated to acquire the land and develop the estimated Rs 820-crore project at Poonamalle near here. ASK Investment has made its part of the investment through optional convertible debentures.
Ashish Puravankara, joint managing director, Puravankara Projects Ltd, said it was the first private equity partnership for them, and going forward, the company would continue to raise money from PEs, will enter into JVs and other models.
“The deal is the culmination of the long-term partnerships with our investors and demonstrates their confidence in the group. The foundational aspect of the partnership has been the alignment of interests and meeting of synergies, with a strong focus on value creation,” he said.
Provident would soon enter the Hyderabad market and is considering launching projects in cities, including Mumbai and Pune, where its parent company has a strong presence.
“In the event of default, it (the investment) could be converted into equity,” said Purvankara.
This is the first time the real estate firm has roped in a PE player to meet its growth objectives, strengthen its balance sheet and its leadership position, he said.
“PE investments will also allow the Group’s ability to expand its geographic reach, enhance service offerings and grow the business in support of customer needs,” he said.
The company has acquired around 31.69 acre in the Poonamalle area with a potential to develop 3.3 million sft. The project will be developed under ‘Provident’ brand in three phases. It is expected to be launched with all statutory approvals by the end of the current financial year, and is would be completed within five years.
With an average selling price of Rs 4,500 for every sft, the project is expected to generate Rs 1,500 crore revenues. “We are hoping the project would generate a return of 25 per cent,” he said, adding it could generate cash of Rs 450 crore as pre-tax.
The Poonamalle micro market addresses the housing requirement of the industrial and manufacturing hub near Sriperumbudur, Oragadam and other locations.
