Ex-Citi property's Hansoty to start fund for India

Ravi Hansoty, the former Asia-Pacific head at Citi Property Investors, plans to raise as much as $350 million by the end of next year for an India property fund.

The fund aimed to buy land to build apartments and hotels in India as early as June, said Hansoty, who left Citigroup’s real estate asset management unit in November. He would set up his company in Mumbai and may relocate from Hong Kong after he stopped accepting new money from investors.

Hansoty aims to take advantage of the increasing demand for housing in one of Asia’s fastest growing economies. Eight funds are raising $1.6 billion to invest in India, London-based research firm Preqin said in a November report, while an estimated 38 million homes are needed in the nation of 1.2 billion people by 2030, according to San Francisco-based McKinsey Global Institute.

 

“Home ownership is extremely low in India,” said Hansoty. “There is significant demand that is going to come online in the future for housing needs.”

Development projects will be done with joint-venture partners who would be responsible for building apartments and hotels, Hansoty said.

Total real-estate transactions in India rose 17 per cent in the nine months ended September compared to an year earlier, according to Real Capital Analytics, a New York-based property-data provider.

Hotel demand
The fund would seek to develop hotels and buy existing ones amid rising demand for business and leisure travel in the country, Hansoty said.

Fairmont Raffles Holdings International plans to add six hotels under its Swissotel brand in India in the next five years to tap the growing demand for business travel in the country, Aiden McAuley, vice president, Asia-Pacific, Swissotel Hotels & Resorts, had said on November 22.

The occupancy rate for hotels in India rose 7.8 per cent last year because of domestic demand, according to a report by HVS, a global hospitality consultancy. Revenue per available room more than doubled to Rs 4,177 ($91) from Rs 1,889 in the last decade, the report showed.

The segment that offered the best opportunity was the one for hotels in the $100-$150 a night price range because they never existed in India until recent years, Hansoty said.

‘Plenty of opportunity’
“In that segment, there are very few hotels which are branded, meaning you have a recognized brand which one can relate to and have a chain of these hotels across India,” Hansoty said. “Given the size of the country, there is plenty of opportunity to do that in multiple cities.”

While with Citi Property, Hansoty invested in five hotels in India under the Aloft brand, part of White Plains, New York-based Starwood Hotels & Resorts Worldwide, he said. Two were completed this year and the rest were due next year, he added.