Altico commits $59m to two real estate projects

The Indian NBFC ended 2016 by making real estate investments in Pune and Noida.

India’s non-banking financial company Altico Capital has committed over INR4 billion ($59 million; €56 million) in two separate real estate development projects in Pune and Noida.

The manager is providing INR1.75 billion for Puneville, a Pune-based residential project developed by Pharande. This is Altico’s second investment backing the developer after its initial commitment of INR1.8 billion in July 2016.

It is putting INR2.25 billion into the Greens II project, a brownfield residential scheme led by real estate developer Panchsheel at Noida Extension in Greater Noida.

The transaction takes the form of five-year structured debt which will be used to complete the projects, which are claimed to be at an advanced stage of construction.

“In terms of absorption, Greater Noida is the largest micro-market in NCR [National Capital Region]. Also, while the Noida market has seen a slowdown in sales, Greater Noida, and more specifically Noida Extension within that, has seen an uptake in sales as well as a reduction in inventory overhang over the last year owing to the affordable ticket sizes in this location,” said Sanjay Grewal, CEO, Altico Capital.

Pharande’s Puneville project covers an aggregate saleable area of two million sq ft across 18 high-rise residential towers and 1,530 units. The first phase of the project is more than 65 percent sold.

Panchsheel’s Greens II has aggregate saleable area of 5.5 million sq ft, with 4,200 residential units across 28 high-rise towers and 200 villas. Over half of the units have been booked.

“We will continue to back strong and resourceful developers who have consistently shown superior execution and delivery track record in their respective micro markets. Our focus will remain on funding mid-income and affordable residential projects with some degree of established marketability,” Grewal added.

Altico has been actively lending to affordable residential projects in tier-one cities in India such as Mumbai, Bengaluru and Pune. Last month, it partnered with global alternatives investor KKR to invest INR4.35 billion in real estate developer SARE Homes’ township project. It plans to invest INR50 billion in residential real estate projects by March 2017 across the region.