FINANCE Global investment firm KKR and Singapore’s sovereign wealth fund GIC have teamed up to provide structured credit to India’s blossoming real estate sector.
Ralph Rosenberg, global head of KKR Real Estate, said that the establishment of the non-banking financial company marked a milestone for its global real estate platform.
“We are excited to assist a sector that is still under-built,” said Rosenberg. “While many lenders provide debt to this sector, there is a need for solution-oriented, non-dilutive capital for property developers. We intend to fill that gap and contribute to the continued development of India’s residential and commercial real estate sectors.”
Sanjay Nayar, chief executive of KKR India, added: “This sector-focused NBFC further enables KKR to provide tailored financing solutions to companies and adds to our established private equity and lending businesses in India.”
KKR first started investing in Indian real estate last year, transacting around $190m (£126m) in the country.
The investment giant has been active in property since 2011 and has committed more than $1.8bn of equity to the sector through 29 transactions across the US, Europe and
Asia.
The firm is also reported to be preparing to begin investing in real estate debt after hiring a team of experts from Rialto Capital Management.
Debt portfolio sales hit new highs last year, according to PwC, with between €110bn and €120bn (£86bn-£94bn) traded – almost double that achieved in 2013 (6 December 2014, p47).
Sales are expected to continue apace this year, with banks also looking to sell performing loans alongside the non-performing loans they have been disposing of since the downturn. The switch is expected to attract increased interest in real estate debt from a range of new investors.
Find out why KKR is keen to invest in Indian property, read EG’s India special here
