Century Real Estate raises ₹450 crore from Edelweiss to buy land and pay debts

Bengaluru: Century Real Estate Holdings Pvt Ltd has secured ₹450 crore of debt financing from Edelweiss Alternative Asset Advisors Limited, the asset management arm of financial services firm Edelweiss Group, a top company executive said.

The Bengaluru-based developer will use around 40% of the funds to buy a 72-acre land parcel for a plotted residential project near the international airport at Devanahalli in north Bengaluru. It will use the rest of the money to repay existing debt and as working capital for new and existing projects. Century Real Estate, one of the largest landowners in Bengaluru, has largely focused on the north of the city where it has a significant land bank.

Century Real Estate managing director Ravindra Pai said in an interview, “Bengaluru’s residential market has been robust post-covid. In FY24 we achieved a sales milestone of ₹1,000 crore. We aim to double sales to ₹2,000 crore in FY25. We have a significant pipeline of inventory, including residential and plotted projects.”

An Edelweiss spokesperson declined to comment on the transaction.

Property consultants said debt transactions in housing projects have increased of late because of sales momentum in the residential sector and the consequent need for working capital. A number of private equity and real estate credit funds such as Nisus Finance, PAG Asia, ASK Property Fund, HDFC Capital among others have been active in the residential space.

Prestige Group recently said Abu Dhabi Investment Authority (ADIA) and Kotak AIF would invest ₹2,001 crore in its four residential projects in a quasi-debt deal, and Nisus Finance, with its sponsor and strategic partner BCD Group, invested ₹105 crore in a subsidiary of Shapoorji Pallonji Real Estate.

“Domestic investors are increasingly gaining ground in real estate. It is evident in the whopping 45% share in investments during January-March 2024, a marked surge from prior years. Within domestic institutional investments, office and residential assets comprised about 66%. This also underscores the growing confidence of a diversified spectrum of investors across multiple investment strategies including credit and acquisitions,” said Piyush Gupta, managing director, capital markets & investment services, at property advisory Colliers India.

Century Real Estate has completed around 20 residential and plotted development projects, and has three residential and two plotted projects under construction. It has also completed five commercial real estate projects and has four more in the pipeline, including a 2.5 million sq ft office project in north Bengaluru’s Hebbal area, in a joint venture with another Bengaluru-based Prestige Group, which will develop the project on land owned by Century.

In October 2023 Edelweiss Alternatives said it had raised $1 billion for its third special situations fund. It has invested in sectors such as roads, steel, paper, hotels, leased offices and residential projects.