Realtors hiring from PEs, banks to raise funds in liquidity-short sector

Real estate companies are hiring senior executives from private equity (PE) firms or with banking and consulting backgrounds as they look to raise funds and sell assets to energise their balance sheets in the liquidity-short sector.
 
Most property developers are in dire need of funds after non-banking finance companies (NBFCs) began cutting disbursal after the IL&FS default, say consultants who deal with realty companies.
 
Recently, Gurugram-based developer M3M India hired Ritesh Agarwal in a corporate strategy role. He had been vice-president at Edelweiss Capital and associate VP at ICICI Prudential AMC. Before joining M3M, he was an independent investment specialist for almost 18 months. M3M is actively raising funds and forging tie-ups. It got a commitment of Rs 850 crore from Piramal Enterprises last August for a mixed-use property project, on 185 acres it had acquired for Rs 1,211 crore from the Sahara group three years ago. 
 
In another instance, Ashish Bhasin, principal-investments at Motilal Oswal Real Estate Bengaluru-based developer Garden City in a senior role.
 
The trend started when Bengaluru-based Puravankara hired PE veteran Kuldip Chawla as its chief financial officer in 2017. He had worked with Red Fort Capital, Unitech Investors and others.
 
Last year, Puravankara said it would create two investment platforms, for affordable housing and commercial real estate. It plans a commercial portfolio of 10 million sq ft in Mumbai, Pune, Bengaluru and so on.
 
"Real estate is in the cusp of transformation, with a considerable shift in the market dynamics. In this high-octane environment, it is ideal to have an expert or team of experts who understands these transitions, especially pertaining to finances. Such individuals, along with their core functional expertise, add tremendous value to the overall executive team," said Ashish R Puravankara, managing director.
 
Some developers have hired bankers for new ventures. Noida-based ATS, which launched an affordable and mid-income housing venture named HomeKraft, hired Prasoon Chauhan, president of YES Bank as its chief executive officer (CEO) last year.
 

Anuj Puri, chairman at Anarock Property Consultants, says with the various disruptions in real estate, there is a big requirement for such services from those in need for PE funding or looking to divest holdings to limber up their balance sheets and portfolios.
 
“Such functions require deep industry contacts specific to real estate funding, especially at the provider side. As well as a stature of credibility and integrity which stakeholders can and rely on. As a consequence, major real estate companies are beefing up on experts in real estate capital markets,” Puri said.
 
Last year, Singapore-based developer and investor Mapletree hired Hardip Dayal, previously head of capital markets at JLL, a US-based property consultant. Mapletree has bought SP Infocity in Chennai for Rs 2,400 crore.
 
Abhishek Goenka, partner at consultants PwC, joined Cowrks, a co-working space provider promoted by the RMZ family, as chief financial officer. He joined, he says, due to the innovations the company has adopted and is looking to implement. Menda family scion Sidharth Menda spearheads Cowrks as CEO. Goenka also works as CEO of the RMZ family office.
 
“The role I have taken allows me to harness my experience and expertise in being able to drive many of the dramatic changes the organisation is looking to implement. The scale of growth in the sector, the increasing professionalism and the innovation will all drive more and more professionals from other sectors to jump ship and become part of the sector that is the largest employer after agriculture,” says Goenka.