Mumbai-based fund manager Nisus Finance and joint venture partner BCD Group, a real estate firm, have identified stressed residential assets worth around Rs 1000 crore, totaling five million sq. ft across Bengaluru.
"Since April, we have seen high interest from funds looking to bail them out. The Bengaluru assets would only give us Rs 8000 crore of value once acquired and completed. We also have similar opportunities in other big metros,’ said Amit Goenka, managing partner, Nisus Finance.
Nisus and BCD India have signed an agreement to work together on projects. Nisus will bring its financial expertise, and BCD India will bring its technical expertise, sales, and CRM.
"From breathing new life into projects stuck due to a shortage of funds to creating multi-dimensional value, this partnership will witness it all. The new fund will be a much-needed relief for developers across India, especially after the last two pandemic stricken years that we have faced," said Angad Singh Bedi, MD, BCD India.
Nisus and BCD India are in the process of raising their maiden stress fund for stressed and incomplete projects. The fund has a tenure of five years, which is extendable by two years, and targets a gross IRR of around 20-21%.
"We expect the first close of the real estate special opportunities fund to be over the next 90 days," said Goenka. It tries to get consistent, risk-adjusted returns by making opportunistic, structured medium-term investments in affordable housing for middle-income people and plotted development projects.
According to the company's experts, there is an opportunity to revive $15 bn worth of residential assets across the country. Distressed asset funds, both foreign and domestic, are emerging as a new source of credit and partnership for corporates looking to acquire these assets at a deep discount to replacement value.
Nisus Finance Investment Managers LLP, along with partner Dalmia Group, managed a Real Estate Credit Opportunities Fund-I (RECOF - I), an alternative investment fund (AIF) category II fund, registered with SEBI, with a corpus of Rs 500 crore, is a real estate focused fund. In the past six months, the fund closed Rs 335 crore worth of transactions across six deals in Mumbai and Bengaluru.
Nisus has managed Rs 950 crore worth of investments in real estate; the team has a track record of managing Rs 5000 crore of real estate assets under management across four funds. BCD is one of the oldest and leading EPC players and has delivered around 70 million sq ft of projects across segments in India and abroad.
