Piramal Fund to expand portfolio in commercial realty segment

Piramal Group's financial services arm Piramal Fund Management (PFM) plans to expand its portfolio in the commercial segment by offering flexi lease rental discounting (LRD) for completed commercial assets and is targetting a book size of Rs 10,000 crore by fiscal 2018.

PFM has identified an initial pipeline of transactions worth Rs 1,500 crore for two deals with one each in Mumbai and Bengaluru, company's Managing Director Khushru Jijina told PTI here.

"It has been our constant endeavour to expand our portfolio and diversify in new areas of real estate. From being a construction finance and mezzanine fund provider for residential segment we made a foray into the commercial segment. We now want to move a step forward and offer LRD for commercial projects apart from providing construction finance," he said.
 

PFM has been providing unique financial solutions for its development partners with products such as Mumbai Redevelopment Fund, Apartment Fund, Piramal Preferred Partner, among others.

Under this new arrangement, the company is targeting higher liquidity transactions than what the traditional banks are able to offer, along with added flexibility for the developers in terms of both serving and repayment.

The company is targeting a portfolio of around Rs 10,000 crore by fiscal 2018 for this offering and will be looking at projects across six metros including Mumbai, Chennai, Bengaluru, Pune, NCR and Hyderabad.

"Owners of completed assets will therefore, be able to approach PFM to raise significantly more flexible financing than they would otherwise be able to source from a bank.

"This offering is both competitive and flexible and will also enable them to raise more money against the same asset when compared with traditional forms of LRD," he said.

Currently, out of the total portfolio, nearly 52 per cent is towards construction financing which is majorly towards residential projects while commercial is around 20 per cent.

"Going forward, by FY18, we wish to have a healthy mix of residential and commercial in the portfolio and within the two a good mix of construction and mezzanine funding," Jijina added.