ADIA, Kotak to invest ₹2,001 crore in four housing projects of Prestige Group

This investment marks ADIA’s maiden venture into a residential platform in India, expanding beyond its previous commitments in commercial office spaces.

The transaction has been structured as a 60:40 joint venture platform, between ADIA-Kotak and Prestige, where the former will invest ₹2,001 crore in the form of quasi debt. Prestige will contribute the rest.

“The kind of opportunities coming up in the residential sector is huge. The partnership with ADIA-Kotak is long term. The four projects are large, of around 13.5 million sq ft together. Given the increasing demand and consolidation in the sector, this deal will help in accelerating growth and expansion,” Venkat K Narayana, group chief executive of Bengaluru-based Prestige Group told Mint.

Narayana said land for the projects in the four cities has been secured, boasting a combined gross development value (GDV) exceeding ₹18,000 crore.

India’s residential real estate market has witnessed a surge post-pandemic, with companies like Prestige Group, DLF Ltd, Godrej Properties Ltd, and Macrotech Developers Ltd witnessing substantial sales growth in recent years.

Prestige Group, which now has presence across multiple cities, could likely clock around ₹20,000 crore of home sales in 2023-24.

Irfan Razack, chairman and managing director, Prestige Group, said, “This marquee deal not only underscores the confidence of institutional investors in Prestige Group’s execution and corporate governance but also reflects our shared commitment to delivering excellence in real estate development pan-India.”

The real estate firm recently acquired 62.5 acres of land in Indirapuram Extension, in Ghaziabad, for ₹468 crore, to expand its presence in National Capital Region (NCR). It has been focusing on developing large-format township projects.

In November 2022, Kotak Investment Advisors Ltd had secured an anchor investment of $500 million from a subsidiary of ADIA for its $1 billion real estate fund. The fund was targeted at tapping the huge demand for urban housing in the country, ADIA had then said.

“The residential sector has done phenomenally well in the last few years, across markets and price segments. It’s an end-user driven market. From an investment standpoint, credit or debt deals in residential projects have increased. A number of credit funds have also become more active in the residential space,” said Piyush Gupta, managing director- capital markets and investment services at property advisory Colliers India.

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Published: 01 Apr 2024, 11:28 AM IST