Actis makes debut real estate India investment

The emerging market investor has kicked off its India real estate investing with a JV for a retail development in Bangalore.

Actis, an emerging markets fund manager, has invested in a joint venture company to construct a residential and retail development in Bangalore, India. It is private equity investor Actis's first real estate deal in the country, made from the $250 million Actis India Real Estate Fund.

The joint venture investment is being made alongside the Vaishnavi Group, a Bangalore-based company that is involved in residential and commercial projects. Actis is contributing $25 million (€16 million), $7.5 million of which will fund the construction of the Bangalore development. The balance of the investment is for other projects to be developed by the Vaishnavi Group.

The Bangalore development will comprise approximately 925,000 square feet of residential and retail space at Yeshwantpur, a rapidly developing Bangalore suburb. The site is located close to established residential areas and transport links, including the National Highway number 4, linking Bangalore with Mumbai and Pune and planned rail and metro connections to the city as well as the new international airport.

This is the first investment in an Indian development company for Actis, which began putting together a global real estate investment team in 2006. The emerging markets private equity fund has been investing in Indian buyouts for ten years, but only recently has it signaled an interest in Indian real estate.The firm now has a dedicated Indian real estate fund with a corpus of up to $300 million (€216 million). The firm’s real estate team in India is headed by Chanakya Chakravarti, formerly a managing director of Cushman & Wakefield. Actis has previously made buyout investments in India of over $700 million.

The Vaishnavi Group, led by C N Govindaraju, has developed several residential and commercial properties in Bangalore over the last decade. Founded in 1998, the group is currently developing and constructing over 3 million square feet of apartments, luxury villas, residential layouts & commercial space, in Bangalore & Mysore.

“The Vaishnavi Group’s business model fits Actis's strategy of investing and partnering with established local developers working in emerging business destinations and peripheral locations within large metropolitan areas where mid-market residential and commercial properties are in great demand,” said Chanakya Chakravarti, head of Actis’s Indian real estate activities, in a statement.

The firm has been active in real estate in other areas of the world. In 2006 Actis raised its first dedicated real estate fund for sub-Saharan Africa. With leverage, Actis has over $350 million of investment capital to deploy. In the last five years the company has completed developments totaling over 1 million square feet of retail space in Lagos, Accra, Kampala, Nairobi and Dar es Salaam.  The firm has offices in Johannesburg, Mumbai and London. It is backed by the UK government-owned fund of funds CDC Group.