KKR and Altico invest $63.5m in Indian residential project

KKR is accounting for one quarter of the debt investment in the township project in Gurgaon.

Non-banking financial company Altico Capital has partnered with global alternatives investor KKR to invest INR 4.35 billion ($63.5 million; €59 million) in real estate developer SARE Homes’ township project, according to the Indian investment firm.

The investment will be used to finance the company’s 66-acres project in Sector 92 in New Gurgaon region. The township will see the construction of 4,000 residential units over an area of 6.2 million square feet.

“This is a unique opportunity to participate in a large ongoing township project in the New Gurgaon Region – considered the fastest-growing residential micro-market of Gurgaon – with an established and credible partner. The investment aims to underwrite a township development wherein the marketability has been established through sales of close to 4.5 million sq ft. in the project to date,” said Sanjay Grewal, chief executive officer at Altico Capital.

Altico and KKR have contributed INR 3.15 billion and INR 1.20 billion in the form of senior secured debt respectively. This is KKR’s second investment in the developer after an initial INR 2 billion loan to the developer previously.

“We are happy to extend our partnership with SARE Homes and look forward to continuing strong performance on the project, given the high quality developer, affordable unit configurations and attractive location,” said Sanjay Nayar, chief executive officer, KKR India.

According to CBRE India, Gurgaon is the hub of the service industry in National Capital Region. With the government’s ‘Make In India’ initiative, the region is expected to attract more industries, resulting in increased housing demand.

Altico, the non-banking financial company of Clearwater Capital Partners, has traditionally invested in mid-income and affordable housing in India’s tier one property markets including Mumbai, Bengaluru and Pune. It has deployed over $212 million in the domestic real estate market since April this year and has plans to invest INR50 billion in residential real estate projects by March 2017 across the region.