Equity capital preferred by residential property developers through PE

  • Residential property developers are now taking a broad chunk of equity capital through (PE) private equity funds.
  • Real estate firms are in greater need for equity capital in the post-RERA (Real Estate Regulation and Development) Act scenario.
  • Borrowing money will not be easy for everyone as investors will ask for higher collateral and will prefer those developers who have a good track record and strong pipeline of projects
  • Asset Management Firms are now planning to invest across residential projects after the announcement of RERA.
  • Most of the Asset Management Firms will not prefer investing in financing greenfield projects and we will prefer to invest in under-construction residential and office projects
  • what do you mean by Greenfield Projects?

    • Greenfield Projects are the construction projects in which the developer starts constructing from the scratch. The projects are on the unused lands where there is no need to remodel or demolish an existing structure
    • Higher amount of capital is needed to developer for making these projects and the investor has higher risk to lent for these projects