Certus Capital, an institutional real estate investment and advisory company founded by former KKR director Ashish Khandelia, is aiming to close real estate investment deals worth over Rs 500 crore through its digital neo-financing platform Earnnest.me in the next 10-12 months.
Earnnest.me has already invested Rs 40 crore in a Chennai-based real estate company Arun Excello’s portfolio of four affordable housing projects in various micro-markets of the southern city.
The digital platform aims to strike 8-10 deals in the real estate space over the next one year. As per the structure, Certus Capital’s non-banking finance company (NBFC) holds at least 5-10% of the total loan till maturity and brings in underwriting to ensure smooth closures and certainty for the borrowers.
“We plan to own 5-10% of the portfolios to have skin in the game, bringing credibility to the transaction and confidence to the investors with our presence throughout the investment cycle,” Ashish Khandelia, Founder, Certus Capital, told ET. “The time is favourable to invest in the residential property sector given all-time low home loan rates, housing affordability at its best in over 15 years and Covid19 putting a premium on home ownership.”
The platform will be investing in projects of developers with proven track record and demonstrated market fit. It aims to generate mid-teen returns for its investors by infusing capital in projects that have already secured approvals.
Certus Capital is already working on a few transactions in key property markets of the country including Mumbai, Pune, Bangalore, Chennai and Hyderabad. The company will focus on affordable and mid-income residential projects in western and southern India and may also consider few investment opportunities in tier II cities of India. It is keen on deploying capital in residential real estate projects given the ongoing upswing both driven by cyclicality and demographics.
“Our ultimate aim is to build a neo-financing platform that offers investors a wide variety of options, co-invested by an expert team that does thorough diligence before their investment. We have a peculiar situation in the country where only fixed income instruments with premium ratings are available to investors. There is enough investor interest but hardly any options. We plan to broaden the choices and deepen the fixed income market,” he added.
Since its inception in 2018, Certus Capital has engaged with NBFCs, housing finance companies and foreign institutional investors in evaluation of over Rs 40,000 crore of real estate credit exposure. Foreign investors have participated in over $2 billion of such opportunities, offering around 18% secured returns, over the last three years.
