The $250 million equity investment platform of international developer Hines and Abu Dhabi Investment Authority (ADIA) has closed its first investment in the residential space in Gurgaon.
In a unique deal, the investment platform is backing developer Conscient and the two have partnered with another private equity fund IREO to build a residential project on around 10 acre of land in Gurgaon, said three people aware of the development.
Hines-ADIA and Conscient will together invest Rs 400-500 crore to develop a premium residential project in the Golf Course Extension Road area with around 600 apartments while IREO will get a share of the revenues from the project, said one of the people on condition of anonymity.
While most funds investing in Indian real estate have chosen to take the structured debt route to put in money into housing projects, this investment by Hines-ADIA is a pure equity deal where the platform and the developer partner are taking equal risk.
“Hines will also bring in its international residential development and planning experience to the table in this deal,” said the person quoted above.
The partners are also exploring an option where they will start building the project with their own money and sell only once the project hits a certain milestone, which will help them sell at a better price.
Lalit Jain, director, Conscient, confirmed the deal and said with the upturn in the general economic scenario supported by the policies and initiatives of the central and state governments, there has been a substantial absorption of commercial real estate in the past two years in Gurgaon.
“We feel it is a good time to address the needs of the upwardly mobile customers with a project that provides them with not only design, quality and delivery they expect but also gives them the best in terms of location, brand and social infrastructure,” said Jain.
Lalit Goyal, managing director of IREO confirmed the deal but did not comment on the specifics. Hines and ADIA did not respond to email questionnaires sent by ET.
Around the land for this project, IREO has earlier built housing projects and is now planning a new office district with IT SEZ space. IREO and Singaporean IT park specialist Ascendas are planning to build 20 million sq ft of office space here, which could increase the demand for housing in this area over the next few years.
“While IREO has developed residential projects in the past, it has now chosen the partnership route because it wants to focus on the developing commercial office buildings and SEZs,” said one of the people quoted earlier.
The real estate sector in India has seen a slowdown over the last few years with sales in most cities dropping drastically and unsold inventory levels rising. This has led to a drop in new project launches in most cities over the last few quarters.
Source: ET Realty