Real estate-focussed private equity Kotak Realty Fund has invested ₹155 crore in Chennai-based developer Alliance Infrastructures’ residential project.

“The deal is in the form of structured debt and we are looking at a four-year tenure,” Vikas Chimakurthy, Senior Executive Director, Kotak Realty Fund, told BusinessLine .

Kotak said it has made the current tranche from the $400-million sovereign fund it had raised in 2014.

Fund use “A major portion of the capital will be used to refinance the existing loans. The balance will be used for project construction,” Suneel Bommireddy, Vice-Chairman, Alliance Group, said.

Orchid Spring, a 2.9-million-sq-feet project near Kottur Lake, will have 2,000 apartments. The mid-priced project has 1-2-3 BHK apartments and penthouses and commands a price of 7,000 per sq feet.

Bommireddy said the company has already delivered 1,500 apartments. “We expect to deliver the balance in 12-15 months time. The real estate market is looking up and we are selling 15,000 sq feet every month in this project,” he added.

Earlier this year, Kotak Realty Fund had raised $250 million from offshore institutional investors to primarily make equity investments in residential projects.

Besides investing in residential projects in the Delhi-NCR, Mumbai, Bengaluru, Hyderabad and Pune, the fund is also looking at commercial office assets.

Rising investments According to a Cushman & Wakefield’s report on private-equity investments in real estate, total inflows in the sector increased 40 per cent in Q1 2016 at ₹3,840 crore compared to the corresponding quarter last year.

The total number of deals closed during the quarter increased 13 per cent to 17 from 15 in the corresponding quarter of 2015. It said that the average deal size increased 23 per cent over Q1 2015.

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