Sundaram Alternates, a subsidiary of the Sundaram Group, is looking to raise up to Rs 1,500 crore (about 182 million) for its fourth real estate private credit fund to cash in on the rising real estate demand in India.
“As far as pricing is concerned, rates have increased from pre-COVID levels and do not appear to have peaked out,” Karthik Athreya, Director and Head of Strategy – Alternative Credit at Sundaram Alternates, told DealStreetAsia in an interview. “Real estate demand is looking strong now despite rising prices,” he added.
Similar to its earlier three real estate credit funds, this fund is designed to provide investors with access to a diversified portfolio of secured real estate investments, with a primary focus on self-liquidating residential projects across key south Indian micro-markets.
The Sundaram Alternative Opportunities Series – High Yield Secured Real Estate Fund IV – would largely operate in the south Indian market and tap cities in Tamil Nadu, Karnataka, Telangana, Kerala, Andhra Pradesh with certain opportunistic investments in Mumbai and Pune.
“The market in the south comprising Bangalore, Chennai, Hyderabad accounts for 25% of demand in India in terms of inventory and capital,” said Athreya, adding that “the southern market presents a lower competitive intensity and has also outperformed over the last decade.”
Earlier this year, Sundaram Alternates made headlines when it made the first close of its corporate credit fund at Rs 205 crore.
