Indian realty pulling a lot more money from private equity, NRIs

After foreign institutional investors (FIIs) lapped up realty stocks in the recently concluded equity placements by property majors, India-focused private equity players and non-resident Indians (NRIs) are loosening their purse strings in the real estate space.

Delhi-based realty major Parsvnath Developers said on Thursday it has signed an agreement with realty fund Red Fort Capital to invest Rs 90 crore in its premium luxury project in Delhi, making it the first PE deal in the housing segment in the June quarter.

Red Fort picked up an 18 per cent stake in Parsvnath Landmark Developers Pvt Ltd (PLDPL), which is developing the 16.84-acre project in Civil Lines in north Delhi.

SUN Apollo Ventures, an international property fund, picked up a 15 per cent stake in Mumbai-based Keystone Realtors for Rs 300 crore earlier this year, after a long lull in the PE-realty space.

“PE is getting back in real estate as valuations have become reasonable, confidence is reviving and end-user demand is coming back. Though demand for premium housing is down, investors and buyers are showing interest in good projects,” said Anuj Puri, chairman of Jones Lang LaSalle Meghraj (JLLM), an international property consultancy.

FIIs oversubscribed for stocks in the qualified institutional placements (QIPs) of Unitech and Indiabulls and bought stake sold by the promoters of DLF, the country’s largest developer, indicating a renewed interest by investors in property space.

In a separate development, Maharashtra Chamber of Housing Industry (MCHI), a realty developers’ body, said on Thursday its twelfth India Realty Expo 2009 held in Dubai saw 106 flats worth Rs 65.33 crore being booked.

“Around 86 flats worth Rs 80.18 crore are in the pipeline for NRIs when they come to India in July-August on their annual vacation,” Zubin Mehta, chief executive of MCHI, said.

The expo evoked an encouraging response, with 2,700 NRIs visiting the exhibition during June 4-6, the release said. “The softening of real estate prices and home loan interest in India were the key reasons that attracted a large number of NRIs during the expo,” Mehta added.