PE exits in Real Estate perk up by 33% in 2013, even as investments dip 8.2%

CHENNAI, India - Jan. 21, 2014 - PRLog -- Private Equity firms focused on the Real Estate sector made 24 exits during 2013 compared to a total of 18 exits announced during 2012, according to analysis by Venture Intelligence, a research service focused on private company financials, transactions and valuations. Ten of these exits with disclosed values harvested $421 million for the investors. The buyback route – acquisition of the PE firm’s interest by the developer - accounted for 23 of the exits, the Venture Intelligence research showed.

Among the larger exits, Farallon Capital sold its stake in seven joint ventures with the Indiabulls Group for nearly INR 1,172 crore, making a profit of 42% on its six year old investment. The SPVs, in which Farallon had invested INR 847 crore in 2007, are at present executing residential projects in the NCR region and Chennai.Landmark Holdings exited Wave Hi-Tech City, a township in Ghaziabad run by the Wave Group, with INR 350 crore at an internal rate of return (IRR) of 20%. In the only exit outside of buybacks, Shriram Properties purchased a 12.5-acre land parcel valued at over INR 110 crore along Bangalore's IT corridor of Sarjapur Road from Golden Gate Properties. The transaction gave Citi an exit from its five-year-old investment in which it committed approximately INR 150 crore as quasi debt.

Investments

Private Equity-Real Estate firms made 45 investments in the Real Estate segment during 2013. Of these, 37 transactions had an announced value of $1,423 million. The activity level was 8.2% lower compared to the 49 investments ($1,202 million across 39 announced deals) in 2012.

The largest PERE investment announced during 2013 was Blackstone and HDFC Venture’s $367 million acquisition of “Vrindavan Tech Village” (along with Embassy Group) from Singapore-based Assetz Property Group. This was followed by Canada Pension Plan Investment Board’s (CPPIB) commitment of $200 million for an 80-20 joint venture with Shapoorji Pallonji Group that will target office assets in Indian metros; Ascendas Trust's INR 600 crore (about $110 million) acquisition of 2 million sq. ft of office space in Hyderabad from Phoenix Group; and StanChart’s joint venture with publicly listed Mahindra Lifespaces to together invest INR 1,000 crore across various projects.

Residential projects accounted for 46.7% of the investments by volume (and 66.7% including townships) during 2013, followed by commercial projects with a 16% share of the pie, the Venture Intelligence research added.

The largest PERE investment announced during 2013 was Blackstone and HDFC Venture’s $367 million acquisition of “Vrindavan Tech Village” (along with Embassy Group) from Singapore-based Assetz Property Group.This was followed by Canada Pension Plan Investment Board’s (CPPIB) commitment of $200 million for an 80-20 joint venture with Shapoorji Pallonji Group that will target office assets in Indian metros; Ascendas Trust's INR 600 crore (about $110 million) acquisition of 2 million sq. ft of office space in Hyderabad from Phoenix Group; and StanChart’s joint venture with publicly listed Mahindra Lifespaces to together invest INR 1,000 crore across various projects.

Residential projects accounted for 46.7% of the investments by volume (and 66.7% including townships) during 2013, followed by commercial projects with a 16% share of the pie, the Venture Intelligence research added.