Kotak Mahindra Group raises $237m for Indian realty
India’s Kotak Mahindra Group has closed a commitment of INR16 billion ($237 million) from institutional investors for equity investments in realty projects.
"We have sufficient dry powder from our previous pool of capital to address the structured debt requirements of the real estate industry," Kotak Realty Fund chief investment officer Vikas Chimakurthy said. "This new pool of capital will address the equity requirements of the sector. We anticipate that the correction in the residential market will reflect in land values over the next few quarters which will make the equity investment argument attractive."
The investment follows on a $200 million raising in 2013-14 by Abu Dhabi Investment Authority aimed at housing markets including Mumbai, Delhi, Bangalore and Pune. The fund has achieved a total of $1.2 billion in capital investments so far across 40 project representing some 65 million square feet of residential development.
Founded in 2005, Kotak Realty Fund targets scalable projects using an active management model. It attributed the latest raising in part to clarifications by the Indian government, which have enabled the vehicle to be structured as an alternative investment fund. The country's newest Union Budget offered provisions to relax regulations, including more flexible foreign investment limits.
Recent investment activity in the Indian realty space has included major commitments from Goldman Sachs and Warburg Pincus as well as a move by VC-backed Quikr to buy property search website CommonFloor.
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