Kotak Mahindra Bank’s - property investment arm - Kotak Realty Fund, has managed to raise around Rs 523 crore from domestic investors for a fund that will mainly invest in high-yield debt instruments of real estate developers. The primary focus of the fund will be on residential projects.
The real estate sector is facing with tremendous financing constraints which will help provide the funds with attractive investment opportunities. In recent months, Indian developers have come under pressure as rising interest rates and elevated real estate price has discouraged buyers which in turn has became more expensive for builders to access funds.
In a bet on the long-term case for property in Asia's third-largest economy, domestic property-fund houses including Kotak Realty, and a fund backed by UK private-equity firm 3i Group - IndiaReit Fund Advisors, are in the process of raising about $1 billion in total. Kotak Realty Fund currently manages about $700 million across five funds.
