News: Piramal Gives Rs 425 Crore For Vatika Project- 08.01.2017

Piramal gives Rs 425 crore for Vatika project 

MUMBAI: Piramal Fund Management, the real estate investment arm of Piramal Enterprise, has extended Rs 425 crore as construction finance for realty developer Vatika Group's commercial project One on One in Gurgaon, said two persons familiar with the development. The project, being developed on 13 acre land parcel along NH­8, is estimated to have 2 million sq ft commercial space. It is expected to be developed in phases and two towers of the project’s first phase are currently under construction. "The deal has been inked now and the disbursement will start soon," said one of the persons mentioned above. This is Piramal Fund Management's third transaction with the Gurgaon­based real estate developer. Last year, the fund had sanctioned Rs 150­crore construction finance facility for the developer’s a commercial project in Faridabad. Piramal Fund Management confirmed the transaction. "The investment is in the form of construction finance debt, and disbursement would be milestone linked… The total tenure of the facility is 5 years," the fund said in an email response to ET's query. Email queries to Vatika Group and transaction advisor CBRE remained unanswered till press­time. "Vatika is a premier Tier I developer in NCR and is focused on development of Grade A commercial properties and township developments. He is one of our preferred partners in the region. The funding is in a city­centric project and the investment will be used to achieve financial closure of the project. This will be our third investment with the group," said Khushru Jijina, managing director, Piramal Fund Management. Last week, in one of the largest real estate debt transactions this year, Vatika Group raised Rs 700 crore from Altico Capital, a non­banking financial company (NBFC). The first tranche of Rs 475 crore has already been deployed by Altico. The rest of the funding will come in subsequent stages as the project is being developed over several phases. Vatika has so far delivered around 42 million sq ft and has additional 50 million sq ft under across residential townships, offices and hotels. In the last two years, Piramal Fund Management and Singapore's sovereign wealth fund GIC have invested in Vatika’s projects

Piramal Fund Management, the wholesale fund and funding arm of the Piramal Group, focuses on real estate addressing the funding needs across entire capital stack from early­stage private equity to senior secured debt and even construction finance. The fund’s total book size was about Rs 19,170 crore as of September end. It operates also in non­real estate sectors, including infrastructure and renewables through the Structured Finance Group. Under phase I of Piramal Preferred Partner programme's proposed credit limit of Rs 15,000 crore, it has so far sanctioned Rs 8,000 crore. Its Mumbai Redevelopment Fund worth Rs 500 crore, launched in April 2012, is fully deployed and has returned over 90% to investors, while its Apartment Fund, worth Rs 570 crore, is 85% deployed. Piramal Fund Management is also working on a plan to launch a fund that will help builders comply with project financing norms under Real Estate Regulatory Act. According to RERA regulations, builders will have to maintain 70% revenue of any project in an escrow account