ASK boosts Godrej redevelopment project with $20m
ASK Property Investment Advisors has injected INR1 billion ($19.8 million) into Godrej Properties’ (GPL) first redevelopment project. This comes five months after it was announced that Godrej was looking to exit up to 49% of a commercial realty project in Mumbai to a private equity investor.
The cash boost from ASK, the real estate-focused private equity arm of financial services firm ASK Group, gives the investor a 49% stake in the special purpose vehicle Godrej Landmark Redevelopers. Godrej Landmark is working on a residential re-development venture in Sahakar Nagar in Chembur, Mumbai, in collaboration with Kamla Landmarc Property Leasing and Finance and 18 societies.
"This fits in well with GPL's strategy of efficient capital management and demonstrates our continued ability to attract equity capital in difficult market conditions," commented Pirojsha Godrej, who became MD and CEO of GPL on Sunday.
The project is spread over 14,600 square meters and will offer up to 600,000 sq ft of saleable area. The proposal is to develop a modern group housing residential development, comprising two, 2.5, and three bedroom apartments.
Last October, Executive Director Pirojsha Godrej said that as part of a capital-raising initiative, GPL could sell up to 49% of a project being developed with India's Jet Airway.
GPL had INR11.52 billion in net debt as of the end of September 2011. This translates to a debt-to-equity ratio of 1.22, compared to 0.64 in 2010.
According to property consultancy Knight Frank, Indian property developers will borrow increasing amounts from private equity funds. Developers have begun to look more to private sources for funding due to a slowdown in sales and a consequent tightening of lending conditions by banks and finance companies.
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