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India : CLOVER Greens to be acquired by Assetz and Avenue Venture

August 8, 2014

Realty firm Assetz Homes Pvt. Ltd and real estate private equity firm Avenue Venture Partners Llp are all prepared to acquire out a luxury golf villa project near Sarjapur Road in Bangalore from Kotak Realty Fund for an unrevealed amount, said people concerned in the deal.

The project, Clover Greens, has an 18-hole operational golf course and will have 140 luxury homes priced at Rs.4 crore and above.

This would indicate the 3rd investment of Avenue Venture, established by previous executives Akshay Dewani and Jagannath Shetty of Birla Sun Life Asset Management Co. Ltd, into a project being developed by Assetz Homes. This deal more interestingly, is in the nature of a reinvestment by Avenue Venture with the cash flows generated by the exit from its 2012 investment in Assetz s East Point project in east Bangalore.

Avenue leaft the Assetz project this year with 62% internal rate of return (IRR), considered very high in the real estate private equity scenario, on a Rs.21 crore investment in 2012. ...

Akshay Dewani, chief investment officer, Avenue Venture said that funding of the deal from the cash flows from the first exit marks a trend where an exit happened early on and we could reinvest the money within the first two years.

Assetz will in addition give an exit to Avenue Venture in another project this year, where the latter had invested in 2013, and is in the process of bringing a new investor on board, said Assetz Homes chief executive Ben Salmon.

Kotak Realty Fund had spent in the Clover Greens project from one of its early funds, Kotak India Real Estate Fund 1 of 2006. Kotak Realty Fund was concerned in the project in the capacity of both an investor and developer, till it hired Assetz Homes as a development manager a year-and-a-half back.

Assetz with this deal takes over development control of the project and intends to complete it in the next three years. Salmon said, Because of the innate nature of the project, where 10,000 square feet of land area is being given for a villa to be constructed on it, there is a customer base for such a luxury product. There is also an opportunity to buy the land now and build the villas within 24 months .

Salmon said that the company is consistently finding investors in the sub-Rs.50 crore range, which is why there is a continuing partnership with Avenue Venture.

Niche real estate funds are gaining a strong foothold with a plan to set up capital fast and make quick exits with profitable returns, breathing a new lease of life in projects.

Ambar Maheshwari, managing director-corporate finance at Jones Lang LaSalle, a property advisory said, Reinvesting is interesting because most funds have a strict policy on returning money to investors while some funds have a clause for reinvesting, where they either return money to investors or re-invest the capital back into projects .

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Source: TendersInfo (India)

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