Alternative Investment

Sowparnika Projects: Walton Street Blacksoil Real Estate Debt Fund II invests Rs 165 cr in Sowparnika Projects

Alternative investment platform Walton Street BlackSoil Real Estate Debt Fund II has invested Rs 165 crore in Sowparnika Homes Pvt Ltd for a portfolio of projects across Bengaluru.

These projects cater to the mid-income and affordable segment with an average ticket size of Rs 50 lakh and are located near key employment centres and IT hubs such as Sarjapur Road, Whitefield and Old Madras Road.

“This is the biggest investment made by WSBREDF-II and we will facilitate the delivery of 2,750 homes in the above category,” said Vimal Jangla, managing partner of WSB Real Estate Partners.

Sowparnika has delivered more than 5 million square feet, covering more than 7,500 homes, in this segment, and currently has 4,500 homes spread across 4 million sq ft under development in Bengaluru.
“Our partnership with Walton Street BlackSoil will help us deliver high-quality value homes and timely delivery of apartments to end users in the affordable and mid-income segment,” said Ramji Subramaniam, promoter of Sowparnika Projects. “We are aligned with the prime minister’s ‘Housing for All’ scheme,” he added.

WSBREDF-II recently invested over Rs 105 crore in two under-construction mid-income housing projects of Pune-based realty developer Paranjape Group.

The real estate debt fund has also invested Rs 110 crore across two housing projects – Krishnaiah Projects, part of Bollineni group, and Jain Housing and Construction – in Chennai and Hyderabad.

“WSBREDF-II has already crossed its target fund size of Rs 500 crore and stepped into the green shoe. The fund is expected to close shortly,” Jangla said. “We have seen active participation from notable stakeholders, including large family offices, corporates, offshore investors, and HNIs. With this investment, two-thirds of the target fund size has already been committed across seven investments.”

The fund focuses on investing, through structured debt, in residential real estate projects serving the mid-income and affordable housing segments across select tier-I cities and looks to partner with developers with robust execution and delivery track record.

WSBREDF-I, has made six full exits and three partial exits across multiple investments with the real estate development arm of Bollineni Group, Puravankara, and Saket, amongst others from its first fund.

“We returned over 105% of the capital to our investors in terms of principal plus interest and the remaining exits shall mature over the next 18 months,” Jangla said.

These investments were spread across multiple residential projects located in the southern metropolitan cities of Bengaluru, Hyderabad, and Chennai. “All these projects cater primarily to the mid-income segment situated in prime areas of these cities,” he said.

Walton Street BlackSoil (WSB), an alternate investment platform jointly held by the ex-India management team of Walton Street (Kaushik Desai, Vinit Prabhugaonkar, and Vimal Jangla) and BlackSoil group, have been investing in the Indian real estate space since 2008-09.

WSB and its affiliates have managed or committed more than Rs 1,750 crore ($230 million) of debt capital in Indian residential real estate.

Spread over five metros and across about 40 transactions, the group has already secured 27 complete and five partial exits from this investment corpus.

According to Colliers, overall, total investments in the Indian real estate touched $3.6 billion during January-September 2022, registering a hike of 18% year on year. “The trend in residential sales is reflective of positive long-term structural change in the sector. Investments in India are getting more broad-based with increased participation from domestic investors,” said Piyush Gupta, managing director, capital markets and investment services, at Colliers India.

Residential real estate performance has surpassed pre-pandemic levels and reached a new high during the July-September quarter, owing to a sustained resurgence in demand despite rising interest rates. The aggregated sales for the first three quarters of fiscal year 2022 are 16% higher than the comparable aggregated sales for the first three quarters of fiscal year 2021.

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