Mumbai, April 04, 2015: Ajay Piramal-led Piramal Fund Management, earlier called Indiareit Fund Advisors, has entered into an agreement to invest Rs 1,200 crore in realty developer Omkar Realtors & Developers’ super luxury residential project Omkar 1973 at Worli in Mumbai. One of the largest single real estate project financing transactions in India, the deal will see the real estate investment platform of Piramal Enterprises invest in the project through debt secured against project receivables and inventory.
The developer will utilise Rs 400 crore to part refinance its existing senior lenders against charge on the cash flows and development rights of the project. The balance Rs 800 crore will be debt secured against a 20:80 scheme and is intended to be drawn as a line towards construction progress over the next two years.
“With this funding, we have achieved full financial closure for the construction and development completion of Omkar 1973,” said Babulal Varma, MD, Omkar Realtors & Developers. “This is another step in an already long and fruitful association with the Piramal Group.”
This is Piramal Fund Management’s third exposure to the Omkar 1973 project. The fund had earlier made an equity investment of Rs 200 crore in the project and extended debt ofRs 130 crore. According to Jijina, the outstanding debt of Rs 120 crore on the project is expected to be repaid by December and equity investment is also scheduled to make an exit in a year.
“Of the total size of 2.4 million sq ft, we have so far sold around 65% of the project including the bookings of 4 lakh sq ft we re-ceived under the recent offer. Two out of three towers are midway to completion and we are aiming to deliver them in the next year and a half to two years,” said Gaurav Gupta, director of Omkar Realtors & Developers.
The Omkar 1973 project, with three high-rise towers, is spread over an area of nine acres off Dr Annie Besant Road. The underconstruction project is being designed by Foster + Partners and has received all approvals.
The developer had recently launched a 20:80 payment scheme at the project and managed to sell over 4 lakh sq ft space in around three months in an otherwise slow velocity market for big-ticket unit purchases.
The construction finance component of the transaction will be utilised for funding interim construction costs under this scheme and is further secured by both the 80% receivables from the area sold as well as a charge of portion of additional area to be retained as security for this loan. Economic Times
