Certus Capital, an institutional real estate investment and advisory company founded by former KKR director Ashish Khandelia, has invested Rs. 130 crores in two prime commercial real estate projects in Pune for its secured bonds platform, Earnnest.me.
The projects, located in sought-after city-centric locations boasting excellent connectivity and developed social infrastructure, are being developed by Mittal Brothers, a prominent Pune-based developer with an impressive track record of 26 projects encompassing over 65 lakh square feet over the past 25 years. The investment, in the form of secured debentures, offers approx. 15% fixed return (IRR), with significant principal cover through underlying cashflows.
One of the projects, which is reasonably advanced, has witnessed significant sale and leasing interest. And the retail levels are operational and occupied by renowned brands such as Pantaloons, McDonald's, Max, and Nonna's pizza chain.
The investment is in line with Certus Capital's aim to invest Rs. 500 crore by FY24 and the company is targeting over Rs. 1,000 crore investment through Earnnest.me in FY25.
Commenting on the investment, Ashish Khandelia, Founder, Certus Capital said, "We are delighted with the investor response we have seen for opportunities brought about by Earnnest.me. We believe it is imperative for India to develop its bond markets to achieve the true potential of our economy. And it is even more so important for capital-intensive sectors such as real estate. Through Earnnest, Certus Capital is playing the role of a market maker for real estate debt capital markets.”
“The office activity in Pune has seen a lot of interest in recent times. We are bringing our 25+ years of real estate experience to city centric commercials projects (under the brand One Place) in Pune and this investment represents our 4th and 5th projects in this segment. These developments target very prime locations and these two are in line with that strategy being located at FC Road and Bund Garden Road. We are happy to partner with Certus Capital and Earnnest.me for these”, said Pavan Mittal of Mittal Brothers.
Since its inception in 2018, Certus Capital has evaluated over Rs 40,000 crore of real estate credit exposure forming part of NBFCs and, housing finance companies. Certus has also advised foreign institutional investors on close to Rs. 10,000 crores of closed investments / platform commitments in real estate credit and warehousing space. Foreign investors participated in over $2 billion of real estate credit opportunities, offering around 18 percent secured returns, over the last three years. In Feb 2022, the company had launched a secured debt investing platform, Earnnest.me, anchored around real estate and received very good investor response with 70% repeat investment interest. The net pre-tax return on these secured, debt investment opportunities offered through Earnnest.me is in the range of 14%-16% and the investors have received timely interest payouts.
In January 2024, Earnnest.me exited its debut investment in the affordable housing sector at the promised 16.1% net return one year ahead of the scheduled maturity due to strong project performance. It has also consolidated its position in premium boutique residential project of realty developer EON Group at Prabhadevi, Mumbai by buying out its 50% partner in that investment and also recently undertook a repeat transaction with one of its existing partners, capitalizing on its proprietary deal access.
