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Kumar Builders received Rs 139 crore investment

The city’s cooling real estate market has witnessed two major transactions recently. Kumar Builders, a leading city-based developer, has received Rs 139 crore investment for its one building — part of a three-tower development — from IL&FS Milestone Group, a private equity fund.

Additionally, the developer-builder has received private equity funding of Rs 100 crore for its 124-acre development at Hinjewadi from Sanjay Dalmia’s Landmark Holdings, giving the latter a 10% stake for the investment. Analysts said this was part of the emerging trend — of builders bringing in investors to take completed projects off their hands.

The funds, thus raised, provide them the much-needed liquidity to complete other projects in hand, with bank funds drying up. Moreover, builders would rather sell the building than go for continuing revenue streams in the form of rentals, in a declining rental scene. Kumar Builder’s chairman Lalit Kumar Jain said: “This infusion of funds will help us service current projects.”

Kumar Builders’ three-tower IT Park at Kalyaninagar is a 1 million sq ft development. IL&FS and the Milestone Group have invested in Tower 2. City-based Zavaray Poonawalla has invested in Tower 1. Talks are on for a similar deal for Tower 3.

The entire three-tower development comprises 10 lakh sq ft, the first two towers being 3 lakh sq ft each and the third tower alone comprising 4 lakh sq ft.

“Tower 3 is the largest of the three buildings and it is under completion. We are in talks with other Indian PE funds and expect to close the deal soon. The funds we raise through these investments in completed projects will be used for the SEZ / township project,” Mr Jain said.

The 124-acre proposed SEZ / township at Hinjewadi is a Rs 1,500-crore project, slated to be launched in April 2009. The development is equally divided into an IT/ hardware SEZ and a residential complex. Landmark Holdings has invested in this project.

“Our plot is centrally located, across Infosys and adjoining Cognizant Technologies,” Mr Jain said, explaining the
location. “This will be launched in phases with Phase I, comprising IT buildings in the SEZ, coming up in 15 months from the launch,” he said.

Source: Economic Times

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