India: Kotak Realty Fund plans to raise $100m for affordable housing investments

Kotak Realty Fund, part of Kotak Mahindra Bank-subsidiary Kotak Investment Advisors, is raising $100 million to invest in affordable housing projects in the country, according to a report in The Economic Times quoting sources.

The new fund will be raised in domestic as well as overseas markets, said the report.

This latest fund comes a year after Kotak Realty raised $250 million from offshore institutional investors to primarily make equity investments in residential projects. It is eyeing areas including Mumbai Metropolitan Region, National Capital Region, Bengaluru, Pune and Hyderabad.

As per the report, the fund has already received commitments worth $50 million from a few global institutional investors.

“In the backdrop of robust demand for affordable housing across the country, the private equity fund has received good response from offshore investors. The balance amount of money will be raised from domestic markets and the fund raising is expected to be concluded soon,” said one of the sources cited in the report.

Targeted at the affordable housing segment in the peripheral areas of top 10 property markets in India, Kotak Realty is planning to invest in residential projects that would offer homes priced in in the range of Rs 30 lakh to Rs 75 lakh. The fund will have total tenure of nine years including two extensions of one year each.

Established in 2005, Kotak Realty has invested in over 40 projects across commercial office, residential, retail, industrial and hospitality sectors. It has total capital commitments worth $1.5 billion, according to the company’s website.

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