Unitech floats Rs 300-crore Mumbai redevelopment fund

Unitech Group, which runs the country’s second-largest developer, Unitech Ltd, launched a Rs 300-crore venture capital fund to raise funds for its slum redevelopment projects in Mumbai, a top group executive said.

Called Mumbai Redevelopment Fund I, the fund will have an initial target of Rs 200 crore and a greenshoe option of Rs 100 crore, the executive said. The group had promised a fixed coupon rate of eight per cent and overall returns of 20 per cent to investors, he said.

The fund, which was launched around two weeks ago, is expected to close within the next two months. When contacted, a Unitech spokesperson confirmed the launched.

The group was also likely to launch similar funds for Mumbai redevelopment projects, the executive said.

The fund was launched by the group’s fund management arm Unitech Realty Investors (URI) and expected to invest initially in the five redevelopment projects in Mumbai. The fund has a minimum investment threshold of Rs 5 lakh.

Unitech, which was battling debt of Rs 10,000 crore during the height of the property slowdown, sold off office and hotel properties, shifted focus towards mid-income housing and restructured its short-term debt to fend off debt woes. Unitech has a debt of Rs 5,500 crore on the books now.

Currently, the company is in the process of demerging its non-core assets such as hotels, special economic zones and so on into a separate arm and list it in the future.

Unitech has over 40 projects in Mumbai with 42 million square feet of saleable area and formed joint ventures with Shivalik Group and Omkar Group to execute these projects.