The Atul Kirloskar and Rahul Kirloskar-promoted group, through Avante Spaces, is building out its real estate platform with an eye on offices, mixed-use and residential developments, beginning with Pune — one of the country’s top real estate markets.
“The group’s foray into real estate is fairly recent. Going forward, the idea is to grow the portfolio and create a resilient and sustainable business across asset classes. We will look at opportunities within land banks owned by the group and also explore opportunities externally,” said Deepak Porayath, chief executive officer, Avante Spaces.
Avante Spaces recently raised ₹1,150 crore through a rupee term loan facility to fund its ongoing commercial development in Pune. Its portfolio includes Avante Business Park in Kothrud, Pune with a development potential of about 2 million square feet (msf). The company is developing an adjacent tower with about 1.7 msf of leasable area, along with supporting retail.
The move comes at a time when several large business houses are looking at real estate as a strategic growth vertical amid rising institutionalisation and consolidation in the sector.
“That (institutionalisation) is precisely why organisations like ours are entering real estate. Over the past two to three decades, the perception of real estate as an asset class has evolved significantly. We are seeing strong participation from domestic and global institutional investors, and Reits (Real estate investment trusts) have performed well in recent years,” Porayath told Business Standard.
Institutionalisation is not limited to funding, but extends to development standards and customer expectations across asset classes, he added. “With our governance framework and legacy, we see this as a strong opportunity.”
Supported by strong balance sheets, established brands, and access to long-term capital, major business houses, including Aditya Birla group, Tata group, Godrej Industries group, L&T group, Raymond group, Wadia group, Shapoorji Pallonji group, Mahindra group and Adani group, are positioning realty as a strategic pillar within their diversified portfolios.
Many conglomerates have strategically built real estate platforms, initially monetising large land banks and later expanding through acquisitions and joint development agreements.
“We will evaluate project structures depending on the opportunity and the micro-market. We are not bound to any single route and are open to outright purchases, JDs, or JVs,” Porayath said.
“In terms of asset classes, we intend to be present across multiple asset categories and micro-markets. We will also explore integrated, mixed-use, and residential projects, depending on location, land parcel size, and opportunity structure,” he added.
Currently, the Kirloskar Industries group has a presence across multiple sectors through its companies, Kirloskar Oil Engines, Kirloskar Pneumatic, Kirloskar Ferrous, Kirloskar Industries, Kirloskar Chillers, Kirloskar Solar, and Kirloskar Institute of Management. Avante Spaces is affiliated to Kirloskar Industries, a listed firm of the group.
 "Deepak Porayath, CEO, Avante Spaces")