India's Prestige Estates signs $240 million residential projects deal with ADIA, Kotak AIF

High-rise buildings are seen in Mumbai

By Rama Venkat

BENGALURU (Reuters) -India's Prestige Estates Projects said on Monday that it signed a deal worth 20 billion rupees (about $240 million) with the Abu Dhabi Investment Authority and Kotak Alternate Investment Fund to develop residential projects in the country.

The funds will be for projects in Bengaluru, Mumbai, Goa and the National Capital Region, with a combined gross development value of more than 180 billion rupees ($2.16 billion), Prestige said.

"The deal is quasi-equity, which will predominantly have optionally convertible debentures and non-convertible debentures," Venkat K Narayana, CEO of Prestige Group, told Reuters.

The company currently has 41 ongoing and 26 upcoming residential projects.

India's growing economy, favourable policy reforms and infrastructure development have made real estate, especially in the office space, a preferable destination for foreign investment, attracting over $5.8 billion in institutional investments across 53 deals in 2023, per data from real estate management firm JLL.

However, the residential sector is also likely to see strong investment momentum due to an increase in disposable income and the desire for spacious homes, real estate firm Colliers said in a report earlier this year.

"This (deal) will likely open doors for more private deals, which firms may look at other than QIPs (qualified institutional placements)," said Shobhit Agarwal, CEO of the capital markets division of real estate consultancy ANAROCK Group.

Last year, real estate developer Embassy Group had raised 12.50 billion rupees from Bain Capital, while Valor Estate, formerly known as D B Realty, raised 9.20 billion rupees from investors including Morgan Stanley and BNP Paribas in March.

Prestige operates in over 12 major locations in India, with about half of its portfolio of completed projects being residential and around 42% commercial.

The company's shares settled 8.3% higher on Monday.

($1 = 83.3110 Indian rupees)

(Reporting by Rama Venkat in Bengaluru; Editing by Rashmi Aich, Savio D'Souza and Sonia Cheema)