Brick Eagle Capital Advisory has received Rs. 50 crore anchor commitment each from Bennett Property Holdings and Axis Bank for its Alternative Investment Fund out of its targeted corpus of Rs 500 crore. The Brick Eagle India Affordable Housing Fund is a Category II AIF registered with SEBI aimed at catalysing 50,000 homes for low income families, while targeting healthy returns for its investors.
Amid increasing investor interest for Affordable Housing, Kirti Timmanagoudar, Managing Partner of Brick Eagle Capital Advisory said “Our fund has been created with Local Developer requirements in mind and will make several small investments at early stages. We invest in Developers that target end customers as home buyers and not investors. Hence the sales velocity, business profitability and ultimately IRRs are not dependent on economic cycles”.
Prior to this fund, Brick Eagle Capital Advisory has raised Rs 400 crore for project finance, which has been deployed across nine cities and eight developers. Recent policy initiatives from the government has been a big boost to affordable housing sector. Policy push includes ‘Infrastructure’ status for the sector, tax holidays for Developers and subsidies of up to Rs.2.7 lakhs for first time home buyers.
Being at the forefront of fostering an ecosystem for credit delivery in this segment, Jagdeep Mallareddy, Head – Retail Lending, Axis Bank said “There is a large, genuine and mostly unmet need for affordable housing and the government’s thrust and commitment towards this is noteworthy. Axis Bank is pleased to invest in Brick Eagle and is hopeful that this partnership will help more people realize their dream of buying a home. The Bank continues to see this as an opportunity to profitably aid the nation in sustainable development.”
Axis Bank’s ‘Asha Home Loan’ was the first affordable home loan product by a bank in the country. Within 2 -3 years of its launch, the Bank has already helped 35,000 families own their dream home.
To achieve ‘Housing for All’, India needs to build $200 billion worth of affordable homes each year. Even by conservative estimates, this requires $30-40 billion of early stage project finance annually. On the other hand, most of these projects are from local developers, requiring Rs. 10-20 crores early stage funding per project. This requires specialist approach, similar to SME lending. In essence, India needs dedicated financial institutions which can raise large corpus and deploy across thousands of affordable housing projects each year. Brick Eagle is one of the few Institutions set up to address this need.
Expressing pleasure at the confidence reposed by two anchor investors, Rajesh Krishnan, founder and CEO of Brick Eagle Group said, “We are delighted to have such esteemed Anchor investors, who are able to bring significant domain expertise to the Fund. Axis Bank is a pioneer in the Affordable Housing sector and Bennett Property is one of the leading real estate investors in India”.
Keen to explore new avenues to invest and partner in real estate space, Joanna DeSouza, President – Bennett Property Holdings (BPHCL) said “We believe that Affordable Housing is a huge opportunity as India moves forward with new themes like Housing for All and Make in India. The segment will take some time to reach a level of maturity and competitiveness with just a few organised service providers. We believe Brick Eagle has the right approach to making a mark in this emerging vertical and wanted to take a lead in supporting this business.” (ENDS)
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