Eurindia set to launch second realty fund
Private equity firm Eurindia is close to launching its second fund for investing in the real estate sector. The size of this fund will be over $100m (Rs 450 crore), sources told ET.
By TNN |
MUMBAI: Private equity firm Eurindia is close to launching its second fund for investing in the real estate sector. The size of this fund will be over $100m (Rs 450 crore), sources told ET.
The realty-oriented fund will be based in Mauritius. Eurindia is likely to make the announcement before the close of this year, reports Rashmi Pratap. Eurindia, a Gibraltar-based fund, will invest in commercial and residential properties and in the hospitality sector.
Investments will be made directly in properties as well as through special purpose vehicles). Eurindia CEO Vinod Ganjoor, however, refused to comment on the fund size. “We are still firming up our plans. It will be premature to comment,” he said.
According to Merrill Lynch, the Indian realty sector is forecast to grow from $12bn in ‘05 to $90bn by ‘15. From foreign property investors like Morgan Stanley and Citigroup to homegrown Kotak India, all are investing in real estate. Eurindia is an early-stage investor.
“We will invest in office space, IT and BPO, residential properties, retail services and hospitality sector, including hotels and service apartments,” he said. “We is looking at buying stakes in developers or taking stakes in specific projects through SPVs,” he added.
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Eurindia is already running an over $21m (Rs 100 crore) fund focused on the $45bn Indian real estate sector. This fund, also based in Mauritius, will be finished by June. “We have done Rs 55 crore investment till now and the rest will be done by the middle of next year,” said Mr Ganjoor. Projects identified for investment include a hotel in Goa and a hospitality sector project in Chennai.
Mr Ganjoor said, “There is high demand for real estate in India. The cost of capital is also on the higher side. In such a scenario, investment in real estate promises good returns.” Eurindia is expecting returns in the range of 25% to 30%.
Between 1995 and ‘05, Eurindia was focused on investments in the IT and BPO sectors. It is the sole institutional investor in Thinksoft, a software testing company and has also invested in Allsec Technologies and OnMobile. “We plan to exit from these companies over the next 12-18 months,” said Mr Ganjoor.
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