Edelweiss invests Rs 355 crore in Hubtown’s two residential projects in Mumbai

Edelweiss invests Rs 355 crore in Hubtown’s two residential projects in Mumbai

Edelweiss Group has invested Rs 355 crore in realty developer ’s two under-construction residential projects in Mumbai through its non-banking finance company ECL Finance and two funds–Edelweiss India Real Estate Fund and EREF Onshore Fund– managed by the group.

Of the funds, ECL Finance invested Rs 205 crore in the developer’s project Hubtown Seasons in Chembur suburb of Mumbai and infused Rs 150 crore in Hubtown Harmony, a premium development at Matunga in central Mumbai.

“Both projects are under construction, with all approvals in place and the investment from Edelweiss shall be utilized towards ensuring faster completion of both projects, aside from partly refinancing of the existing lenders,” Hubtown said in its response to ET’s query.

Hubtown Seasons is spread over a 10-acre land parcel and is a public-private partnership (PPP) project with the government of Maharashtra. The sale potential in the first phase funded by Edelweiss is around 3.5 lakh sq ft of area, and the government obligations in respect of the first phase are completed, and the focus will now be on completing the sale area within the next 2 years.

The Matunga project is spread over an acre near King’s Circle, and is a redevelopment project, wherein the redevelopment component is completed and handed over, and now the company is focussing on ensuring delivery of the sale component of 1 lakh sq ft within 2 years.

Edelweiss declined to comment for the story.

About 20% of the project in Matunga has been sold, while the developer has already achieved 30% sales at the Chembur project.

Earlier this year, global alternative investment management firm Oaktree Capital Management invested Rs 425 crores in Hubtown’s sea-facing luxury residential development 25 South spread over 5.3 acres of land in central Mumbai’s Prabhadevi locality.

Part of the funds raised through this transaction is being utilised to complete the project and partly to retire the existing debt facility of Indiabulls Housing Finance.

The recent uptick in housing sales and expected sustained conversion of housing demand has prompted a revised outlook for the sector’s liquidity scenario.

Financial institutions have started reviewing projects for investments, while real estate developers have also started refinancing their existing high-cost debt with relatively lower-cost loans in the backdrop of reduction in interest rates.

According to ICICI Securities, real estate developers are likely to post record sales booking numbers in the second half of the financial year 2021-22 led by new launches as the momentum of robust response from homebuyers witnessed so far is expected to be continued during the festive October-December quarter.

The beginning of the festive season, the waning of the second Covid wave, record low mortgage rates, strong hiring and salary growth in the information technology, IT-enabled services sector has led to developers preponing many launches to August-September, the report said.

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