Institutional investors repose faith in Hyderabad’s real estate

Real estate funds that have invested in Hyderabad have expressed their readiness to invest more in real estate projects in the city.

Hyderabad: Real estate funds that have invested in Hyderabad have expressed their readiness to invest more in real estate projects in the city.

“Our fund has invested in more than 15 real estate projects in Hyderabad in the last five years. The city will continue to attract a significant share of our new investments given the diverse economic base, world-class infrastructure, and cosmopolitan culture,” said Sharad Mittal of Motilal Oswal Real Estate at the real estate-focused investment summit, organised by industry body Credai Hyderabad in association with Upwisery (earlier StratCap Advisory), an investment banking and financial services firm.

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“Our experience of investing in the city in the last few years has been fantastic as Hyderabad developers have successfully delivered projects on the committed returns and timelines,” said Karthik, representing Sundaram Alternates.

Cost of capital and interest rates might continue to remain high in the near term, which may impact project costs, but the residential demand in Hyderabad will continue to remain robust, said Vaibhav Agarwal from Tata Capital Housing Finance.

“Hyderabad is witnessing good interest from MNCs and large occupiers of office space, and hence global developers like us will continue to look for more development opportunities in the city,” said Parvesh Sharma, Head of Tishman Speyer India.

“In the past few years, we have closed more than 50 sizable, structured funding transactions in Hyderabad. It has all the ingredients to emerge as a truly global city. We expect strong interest from institutional investors/lenders to continue for the foreseeable future,” said Anuj Kapoor, Founder and Partner, Upwisery.

Credai Hyderabad President P Ramakrishna Rao and General Secretary V Rajashekar Reddy said the confidence of the investment community in Hyderabad’s growth story is backed by good governance and proactive infrastructure development.

Meanwhile, research firm Windmill Capital, a subsidiary of financial technology company Smallcase, said the leasable area of listed Real Estate Investment Trust (REITs) in Hyderabad was pegged at 12.7 million sq ft as of September. It was 12.6 million sq ft last year. The city is among four Indian cities that will witness new REIT developments soon and could witness additional 1.8 mn sq ft of new REIT leasable area.

“India’s REITs market is poised for accelerated growth as both investors and sponsors are drawing confidence from evolving regulatory framework, transparency, institutionalised ownership and ability to deliver robust returns. The subscription amount has been reduced from Rs 50,000 to Rs 15,000. This allows greater participation from young retail investors,” said Vasanth Kamath, Founder and CEO, Smallcase.