To launch $350-m pvt equity fund for residential projects

Shailesh Menon

First fund

Trikona Capital

has already invested $250 million (Rs 1,125 crore) in the Indian real estate, construction and hospitality sectors through its first fund. The company has assets of about $2 billion under construction in the country.

Mumbai, Nov. 20

New York-based real estate fund management firm Trikona Capital is venturing into the construction business in India.

The company is in the process of incorporating its new business, construction industry sources said.

Trikona Capital intends to be present in the entire real estate value chain; its own construction business will allow the firm to fund as well as execute its own projects. The company's initial interest would be in residential townships, said a source.

Private equity fund

The Managing Partner of Trikona Capital, Mr Aashish Kalra, declined to comment on this matter, but said his firm is launching a private equity fund of $350 million (over Rs 1,500 crore) for investing in residential projects in India.

"We have some big real estate projects coming up," said Mr Kalra.

Trikona Capital has already invested $250 million (Rs 1,125 crore) in the Indian real estate, construction and hospitality sectors through its first fund. The company has assets of about $2 billion under construction in the country, said Mr Kalra.

"Our primary focus has always been on infrastructure development. Our tie-up with IL&FS (to form Trikona IL&FS Transportation & Networks Ltd) is solely to develop infrastructure in the country. The joint venture will give special impetus to roads and ports," Mr Kalra said.

Hospitality sector

The real estate fund is also eyeing the hospitality sector in India. Trikona plans to fund the construction of about 100 mid-market hotels in India.

"We have a partnership with Intercontinental Group. Anytime they need equity in India we are the preferred providers. Our focus in the hospitality sector would be three-star hotels. Intercontinental Group will constitute about 50 per cent of our portfolio," Mr Kalra said.

Trikona has invested the equivalent of $38.62 million for the completion of an IT park project in Greater Noida. The fund has committed $53.58 million for the project. The project envisages development of about 5.2 million sq.ft of IT and ITES office buildings, 8,94,000 sq.ft of residential apartments, 6,12,000 sq.ft of serviced apartments and hotel space, and 4,77,000 sq.ft of commercial space.

Trikona has also invested significantly in township projects in Thane and the mid-suburbs of Mumbai. The fund has tied-up with IL&FS Investment Managers to develop real estate assets across India.

"We are not here for short-term opportunistic deals. We are here to institutionalise the market and deploy a billion dollars of equity every year. This means we will buy $3-4 billion of assets every year. Trikona will invest $2.5-3 billion in India over the next three years. We want to be scalable in every project we take up,'' Mr Kalra said.

(This article was published in the Business Line print edition dated November 21, 2006)
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