FIRE Capital To Invest In Affordable Housing

As affordable housing is becoming the new mantra for real estate developers, the concept is attracting a lot of attention from the real estate funds fraternity. The $250-million First Indian Real Estate (FIRE) Capital Fund Ltd is making its first deal in the segment.
According to industry sources FIRE Capital is currently in the due diligence stage with the affordable housing investment. “The deal should get concluded within 2-3 weeks,” said the source in the know of the deal.
While, the name of the real estate developer is being guarded by the realty fund, DNA Money has learnt that it is a firm operating out of the eastern region of India. “In most likelihood, the affordable housing project is being developed in West Bengal,” added the source.
The ticket size of the project will be between Rs 8 lakh and Rs 15 lakh across various permutations and combinations of apartment sizes.
Gautam Vashisht, executive director (investments), FIRE Capital Fund, said, “The intent is certainly there in the affordable housing segment in India, particularly in Tier II and Tier III cities.” However, he denied making any comment on the possible investment in affordable housing project in east India.
Fire Capital launched its first fund in 2006 with a corpus of $250 million and has already committed over $150 million across seven investments. Focusing on residential and mixed-use developments centred on residential use, its first investment was in the Indore-based M Jhaveri Group’s 137-acre township. Other investments are also in township projects in Jaipur, Bangalore, Nagpur, Chennai, Ahmedabad and Dehradun.
The venture fund typically makes investments ranging from $5 million to $30 million.
Now with close to 80% of the corpus being deployed, the venture capital fund is planning to raise another fund next year. The amount to be raised is rumoured to be in the region of $500 million. While the primary investors will be from the US and European markets the fund will also look at raising some part of it from the Middle East.
The second fund will also target real estate projects in residential and mixed-use developments (including hotels), and the focus will be on Tier II cities in the country.

One Comment

  1. Posted October 6, 2008 at 4:48 am | Permalink

    Real estate companies are now focusing on the development of low-cost homes targeting the middle and lower-income groups. With the country facing a shortage of 22 million home units, as per a survey by the Housing and Urban Property Allevation Ministry, low-cost projects are the need of the hour. Developers are increasingly venturing into mass-housing or low-cost projects, typically on the periphery of large cities and in Tier-II and III cities. All major developers like Omaxe, DLF, Ansal API and Parsvnath have major plans to venture into low-cost housing.For more view-

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