Piramal Fund Management (PFM), the financial services division of Piramal Enterprises, has invested over INR10 billion ($149 million; €141 million) in two commercial property projects via its Flexi Lease Rental Discounting (LRD) scheme.
The firm has committed INR4.4 billion to a Wadhwa Group commercial property under a seven-year facility. The deal is secured against an exclusive mortgage of the project with a charge over all present and future receivables.
The deal will enable the developer to pay off loans from existing lenders and reduce the overall cost of funds for its existing projects.
The development is located in the prime business district of Bandra Kurla Complex in Mumbai. It has been 98 percent leased to marquee, retail and food & beverage (F&B) outlets.
The second commitment PFM has made is a INR5.8 billion loan to ASF Group’s IT SEZ development in Gurgaon.
ASF Insignia SEZ is a Grade A IT office space located on the Gurgaon-Faridabad road. The development has been fully leased to marquee tenants including TCS, IBM and Ericsson.
“Through these transactions, we have further strengthened our relationship with the Wadhwa Group, an existing ‘Piramal Preferred Partner’, with whom we have done multiple investments in the past as well as initiated a new relationship with the ASF Group,” said Khushru Jijina, managing director at Piramal Fund Management.
“We remain positively inclined towards commercial as an asset class and look forward to actively scaling up our position within this space.”
Domestic developer Wadhwa Group has delivered over 11 million sq. ft. of prime real estate (of which 6 million sq. ft. is commercial real estate) while the ASF Group has delivered three million sq. ft. of IT and commercial assets in India.
Flexi Lease Rental Discounting (LRD) is PFM’s newly launched financing scheme for completed commercial assets including office and retail space. The scheme has deployed over INR20 billion within three months of its launch including transactions with Reliable Group in Mumbai and Mantri Group in Bangalore.
Piramal Fund Management provides both wholesale and retail funding opportunities within real estate and non-real estate sectors across the entire capital stack including early-stage private equity, structured debt, senior secured debt and construction finance.