As private equity deals get more active, cities such as Hyderabad and Kolkata are becoming attractive destinations. The reason being they are still not as expensive as Mumbai, Delhi or Bangalore.
Last week, there were two private equity investment announcements in Kolkata. Red Fort Capital, a Cayman Islands-based private equity fund focused on real estate development, invested in an IT park, being developed by Godrej Properties. While the fund has not announced the exact investment figure, a release from the company says that it has picked up 49% stake in the project and the expected sales figure is around Rs 750 crore.
Yatra Capital, a Jersey-based private equity firm, committed Euro 4.40 million in Jalan InterContinental Hotels for 40% stake in a business hotel in Kolkata. The company is planning to develop a 200-room business hotel, to be operated under the Taj Gateway brand by Indian Hotels.
“In the past two years, there have been some 16 -18 private equity transactions in the real estate sector in Kolkata. The growth curve for Kolkata is expected to stay high for the next 4-5 years. The advantage of Kolkata is that the risk that comes with these investments is low,” said Abhijit Das, managing director (Kolkata) Jones Lang LaSalle Meghraj.
In April this year, Yatra, a property consulting firm, invested Euro 6.69 million in a Hyderabad-based company, Saket Engineers. Saket designs, markets and manages various types of real estate assets, including custom-made homes, residential communities and recreational facilities.
Soon after Yatra’s investment in Saket, an HDFC-sponsored fund invested in Lodha Group’s Hyderabad project. The company plans to develop a 12.9-acres luxury township with 2.5 million sq ft of residential and commercial properties. The company bought a Rs 256-crore property in Eden Square near Kukatpally in Hyderabad for the
purpose.
“We see a great potential in Hyderabad, as it continues to attract new businesses, and expect substantial growth in the demand for residential properties. Kolkata is the commercial and financial hub of eastern India and an important transport and logistic hub for east and northeast regions,” said Ajoy Veer Kapoor, managing director, Saffron Asset Advisors. Saffron manages funds for Yatra. “The advantage with Kolkata and Hyderabad is that despite being metros, they are not as expensive as Mumbai,” added Ajoy.