HDFC Property Fund exits Embassy's Bengaluru project with 2.4x returns

HDFC Property Fund, backed by mortgage lender HDFC, has exited Embassy group’s Bengaluru project with returns of 2.4 multiples, according to a source familiar with the development.

Hiref 1, the international property fund of HDFC Property Fund, had invested Rs 207 crore in Embassy group's ‘Embassy Springs’ project in 2011. It has now sold its stake in the project for Rs 490 crore. The deal was signed late last week, the source added.

The project is located at Devanahalli area and it consists of plotted developments, villas and bungalows.

“Embassy group bought HDFC Fund with internal accruals. Basically, they sold some plots and generated cash flows,” said the source.

HDFC Property Fund has already returned money to investors, the source added. Confirming the exit, Jitu Virvani, chairman and managing director of Embassy group, said, “We have been consistently giving exits to our investors. We are glad that our investors are making money.”

HDFC Property Fund executives could not be contacted for comments.

Hiref 1 is a $800-million, nine-year offshore fund, raised in 2007 and currently in exit mode.

HDFC fund’s exit follows the recent exit by New York Stock Exchange-listed Apollo Global Management’s exit from super luxury project Ahuja Towers in Mumbai at Rs 460 crore or at multiples of 2.3 times.

“Year 2006 will see a lot of exits. We expect a lot Asian, Canadian and American money to come into India this year,” said a senior fund manager, who did not want to be quoted.

Last year, HDFC Property Fund put off plans to launch a $500-million (Rs 3,250 crore) offshore property fund in 2016 to focus on exits from its previous fund and investing money from the latest fund raised in March 2015. The fund is looking to exit two projects of property developer Lodha group in Mumbai and Hyderabad by December 2015, Business Standard had reported last year quoting unnamed sources.

The fund manager is looking to make 2x returns from its Rs 160-crore investment in Lodha's residential project in Hyderabad, sources said, adding the developer had already sold 1,250 units from 1,600 units in the project named Lodha Bellezza. The fund is also looking to exit its investment in the project of Fortuna group in Bengaluru, Embassy group's IT Park in Bengaluru and entity-level investment in New Consolidated Construction Company, sources said.