The private equity realty fund had invested capital at the time of acquiring the 16
acre land parcel which is part of the project in 2012.
The exit is valued at
around 22% internal rate of return over a span of four years
ET Bureau |
Mumbaibased luxury realty
developer Sunteck Realty has
provided an exit worth over
270 crore to Kotak Realty Fund
that had invested 150 crore in
2012 in the company's mixeduse
project Sunteck City,
spread over about 23 acres in
the Goregaon suburb of
The private equity realty fund
had invested capital at the time
of acquiring the 16acre land
parcel which is part of the project in 2012. The exit is valued at around 22% internal
rate of return over a span of four years.
"We have grown with a good mix of debt and equity in the past, which has helped us
keep our debt levels low and optimise cost of funding for growth.
We have been able to
monetise our assets faster and provide exits to partners through excess cash flows,
thus generating attractive return on investment for ourselves and partners," said Kamal
Khetan, CMD, Sunteck Realty, while confirming the exit.
The exit has been provided in multiple tranches through internal accruals and surpluscash flows of first two phases of the project. Of the total 23 acres, Sunteck Realty has
started construction work on seven acres. While it has launched three towers out of a
total of six planned on this seven acre plot, the rest three towers will be launched soon.
The entire 23acre mixeduse project entails total six million sq ft development with
residential, commercial spaces along with retail and entertainment component.
Kotak Realty Fund has made three investments in Sunteck Realty since 200708,
which includes investment in the entity itself as well as two of its projects. Of these, the
fund has already exited its investment in one of Sunteck Realty's luxury project Signia
Isles in BandraKurla Complex with 23% returns.
The fund holds 6% stake in the realty
"We have had a longstanding and successful relationship with Sunteck and we are
happy to get an exit for our investors in this challenging environment.
participate at an early stage in this citycentric project with a good brand and exit in a
timely manner with good returns. We continue to look for such opportunities and would
try to maximise returns of our investors," said S. Sriniwasan, CEO, Kotak Realty.
Kotak Realty Fund has got an exit from several of its investments in recent months.
Last week, the fund made an exit worth 165 crore from a housing project of Delhibased
builder TDI. Last year, it had exited with 155 crore from its investment in a
township project of builder Parsvnath in Sohna near Gurgaon.
Century Real Estate too
had given the fund an exit of 375 crore from its investment in a few projects in
Bengaluru when it raised 725 crore from Piramal Fund and NBFC Altico Capital.
Private Equity Real Estate (PERE) firms have deployed over $5 billion in Indian real
estate companies and projects, the highest since the financial crisis of 2008, according
to research from Venture Intelligence.
Last year saw 90 investments in Indian realty,
and of these, 85 transactions had an announced value of $5,061 million. The year saw
20% higher activity than the previous year which had 75 transactions, though the total
transaction values were significantly higher in 2015 compared with $2,214 million in 57
Funds reported 25 exits during 2015 against a total of 24 exits announced during 2014.
Seventeen of these exits in 2015 were through buybacks which was followed by
secondary sale (sale of stake to another PE investor) which accounted for five exits
and strategic sale (sale to another developer) that accounted for two exits
Source - http://realty.economictimes.indiatimes.com/news/industry/suntek-realty-provides-kotak-fund-over-rs-270-crore-exit/50711665