ASK Group Planning to Invest up to Rs 1,500 crore in Indian Real Estate Market

Ask Group, which is one of the Financial Services Firm is now planning to invest up to Rs 1,500 crore with an aim to set up its own equity investment unit for the Indian real estate market in the current year as it seems that that the demand for mid-segment housing projects could increase. In year 2015, the firm has invested more than Rs 600 crore through three equity deals in real estate projects.

Previous Investment of ASK Group:

According to Amit Bhagat, the MD and CEO of ASK Property Investment Advisors, “In the year 2016, our company will deploy from Rs 1,000-1,500 crore as equity investment in the real estate market of India”. For ASK Group the largest investment deal was last month when they invested Rs 365 crore in a housing project of Rajesh Lifespaces at Vikhroli in Mumbai. Apart from that the company has also invested Rs 125 crore with ATS Group in project which is coming up in Noida and Rs 112 crore in project which is coming up in Purvankara, Bengaluru. As per the statement of Amit Bhagat, “Now we are focusing on the equity investment in the mid-income housing projects, which could have the ticket price of Rs 50-75 lakh bracket and we are expecting that real estate market will remain buoyant in this segment”.

In last five years of duration, ASK Group has invested more than Rs 2,500 crore in real estate market of India. Now the company’s main objective is to invest into the mid-income housing projects in five major cities such as; NCR, Bengaluru, Chennai, Mumbai and Pune. According to Bhagat the company is into the process to raise the s 1,500 crore from domestic and offshore investors, however; the fund raising exercise could be completed in next one to two months. The more he added that due to counter cyclical opportunity, now there are many deep-pocket institutional investors and large funds investors are looking for options to invest into the Indian real estate market.

Through its real estate business ASK Group has manage the funds of up to Rs 3,300 crore and it has committed in 19 projects with more than Rs 2,000 crore. ASK Property Investment Advisors is planning to set up the advice real estate dedicated funds.

India – Most preferable real estate destination

According to recent reports, After replacing the Mumbai, Bengaluru is emerge as the most preferred real estate investment destination among other Indian cities. It seems that Indian real estate market has won the back its old favor as it is one of the most preferred real estate destination for investments in Asia Pacific region, as per the reports of PwC India (PricewaterhouseCoopers India).

According to report of consultancy firm which was titled with “Emerging Trends in Real Estate Asia Pacific 2016” and released on Wednesday, “In last one year, the overseas funds accounted for more than 50 percent of all investment activity in India compared to 26 percent in 2013”. The same reports stated that “Flow of foreign capital in India is increasing dramatically from the end of 2014 as the amount invested was almost 200 percent year-on-year by the end of 2015”, however; the reports was based on the data of Real Capital Analytics which provides information on commercial property.

PricewaterhouseCoopers India, attributed that due to growing interest among NRIs and other foreign investors into the real estate market of India was just because of some of the liberalization measures which was adopted by the central and state governments of India. However; for instance, due to reducing the minimum size of built areas in FDI linked real estate projects to 20,000 sq. m (earlier it was 50,000 sq. m ) has increase the confidence among institutional investors because with this for them it was easy to find exist. According to Abhishek Goenka, Partner at PricewaterhouseCoopers India, “As per the perspective of deal structures, the mezzanine financing continues with a shift in favor of equity structures, especially in big ticket transactions for commercial assets such as; IT Parks and Business Parks. The reports pointed out that foreign private equity funds are among the biggest corporate real estate owners in our country, after starting from scratch in the year 2011 – 2012.

In previous years, Mumbai and New Delhi were among the most preferred real estate investment destination, but this year Bengaluru replaced them after emerging as most preferred real estate investment destination in India. The report mentioned that Bengaluru’s ranking is high as it is one of the major Technology Industry Hub with the availability of a large pool of skilled labor which is necessary to ramp up and backup the start-ups. However; reports, didn’t perceived a huge amount of upcoming supply of commercial office inventory which are in Bengaluru because according to experts it will match in next year as developers are expecting high absorption rate.

Real Estate Market in India

In past few years, real estate market of India has evolved from residential units at great location to luxury and vibrant concept of branded homes. These branded residential units or houses have make up this emerging luxury housing projects where the price of luxury houses are about $ 300,000 for 2000 square feet for the starter size for apartments and into bigger and larger sizes depending on the category of the residential projects. In last 10 years, our country has under gone rapid globalization and urbanization which paved the way for employment opportunities with high income trends. However; these high earning individuals are looking for the world-class amenities to reflect their lifestyle on how they want their homes to look like.

According to real estate experts, currently it is one of the fastest growing clusters in residential housing segment as it would take 1.5 million luxury residential units to cater the demand in the next 10 to 12 years, as per the reports of Business World. In present, most of the real estate developers are taking the advantage from the opportunity which needs to cater the housing needs while also getting high incentives. Now most of the real estate developers are targeting the uber rich of the city, who are willing to pay for property which is luxurious enough to reflect their social as well as financial place in the hierarchy. Apart from that there is also sudden influx for investments on bespoke properties because of the emerging trend of owning luxury as well as more than one property in same or different city in the upper segment of the society.

While making an investment in the premium properties, there are few uber rich individuals who prefer to diversify their assets that can be fueled by several reasons ranging from passionate and practicality inclination to investment opportunities. In present, the fastest growing real estate market of India, its common trend to own more than one property and it’s also the  aspiration for the higher class as more than 80 percent of them are investing in at least two properties while the balance 55 percent stake on three or even more. In Indian real estate market there are also few international developers who are ready to invest in the customized possessions to cater the luxury housing demand for the wealthy who want to be at par with their peers’ or surpass their luxury lifestyle.

Rising aspirations of the wealthy professionals are also in the target market of real estate developers for their premium constructions. Luxury residential units are definitely looking for promising trend in Indian real estate market to gain the momentum, which could even surpass the traditions of real estate market.