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Rediff News  All News  » Business » Indiareit to invest Rs 250 cr in Pune township

Indiareit to invest Rs 250 cr in Pune township

June 14, 2007 14:38 IST

Real estate private equity fund Indiareit will invest Rs 250 crore (Rs 2.5 billion) in the proposed 138-acre township promoted by the Pune-based Paranjape Schemes Construction Ltd.

Ramesh Jogani, CEO and managing director of Indiareit Fund told Business Standard that the investment will be in the form of 30 per cent equity stake in Flagship Infrastructure Pvt Ltd -- a special purpose vehicle company to be floated by Paranjape Schemes.

"The total equity is pegged at about Rs 850 crore (Rs 8.5 billion), the rest coming from promoters," Jogani said.

Jogani said the township, coming up at Hinjavdi near Pune, will comprise an IT special economy zone, residential units, retail spaces and a star hotel.

Paranjape Schemes have already received the in-principle and board approval for developing the SEZ and is awaiting the final notification from the central government. Leading Chinese architect, ECADI has been commissioned to design the project. It is estimated to be completed within a period of six years.

The project entails more than 9 million square feet of development.The entire project will need an investment of about Rs 4,200 crore, Jogani said, adding that the non-equity portion will be funded by lease premiums or sale proceeds.

Jogani said 20 per cent of the Rs 250 crore will come from the Indiareit Domestic Fund and rest from the Indiareit Offshore Fund. Singapore based 3i - one of the world's largest private equity and venture capital firms, is a cornerstone investor in the Indiareit Offshore Fund.

Mark Thornton - 3i Managing Director Singapore & Co-Head, Asia said, "sustained growth in the Indian economy and the resultant inherent demand for real estate,makes the Indian real estate market an attractive investment opportunity."

Industry reports on Pune indicate a shortfall of around 74,000 residential apartments in western Pune as well as demand for more than 240 hotel rooms.

Hinjavdi - with its proximity of key highways connecting to Mumbai and Bangalore and establishment of existing facilities such as Rajiv Gandhi InfoTech Park - will continue to attract more IT firms to set base, the reports say.

Paranjape Schemes Group have to their credit 125 projects so far and is currently gearing up to develop IT parks, star hotels, commercial and entertainment parks, SEZS and larger formats like integrated townships.

BS Reporter in Mumbai/Pune