Macquarie

At a time when cash flows are weak owing to slump in home sales, real estate developers are relying heavily on external sources of capital to drive business. To ease the woes of Indian realty, it is reported that Macquarie Infrastructure and Real Assets (MIRA), an arm of Australia’s Macquarie Group Ltd, is set to invest in the domestic real estate market.

“Macquarie has been planning to invest in real estate in India for a while and has now created a special team to make investments in the sector. This is an appropriate time for Macquarie to start investing because there is a lot of demand for capital, particularly equity, and valuations are reasonable after a long spell of deceleration,” said a source familiar with the development.

MIRA has appointed R.K. Narayan as managing director of its Indian arm, Macquarie Infrastructure and Real Assets (India) Pvt. Ltd, to head real estate investments in India.

The company is in talks with Tata Housing Development Co. Ltd, for setting up an investment platform to invest in luxury residential projects. If the deal is successful, the partners may thrust at least $200 million of equity capital into it, though the shareholding may vary.

MIRA is a large infrastructure asset manager worldwide and its growing real estate portfolio includes 290 retail, commercial, residential and industrial properties in China, Mexico and Australia.

With this announcement, Macquarie joins a slew of other global investors like Warburg Pincus LLC, Goldman Sachs Group Inc. and GIC Pte. Ltd who have already funded real estate projects in India through private equity during the first nine months this year.