Singapore-based Global investment firm The Xander Group Inc. has announced that it is set to make an exit worth around Rs. 700 crore from its investments in realty developer Rustomjee’s subsidiary Kapstone Constructions, said two people familiar with the company’s development. Xander’s private equity arm had invested around Rs. 370 crores in 2014 through non-convertible debentures in Kapstone Constructions, which includes residential projects including Rustomjee Urbania in Thane and Rustomjee Elements in upscale Juhu suburb of Mumbai.

“Keppel Corp., will fund around Rs. 410 crore for exiting Urbania in Thane, while Rustomjee will fund the balance amount for the Elements project in Juhu from its internal accruals,” said one of the persons mentioned above. He further added “The exit will be provided by Rustomjee and one of its partner company a Singapore-based diversified conglomerate. While the exit from Thane project will be funded by the partner, Rustomjee will finance the balance amount for Juhu project from its internal accruals led by recent residential sales,” said one of the persons mentioned above.

The transaction with around two-fold returns on investments, once concluded, will be one of the most profitable exits for a global investor in Indian residential

The transaction with around two-fold returns on investments, once concluded, will be one of the most profitable exits for a global investor in Indian residential market in recent years

market in recent years. It reflects that the residential market is showing signs of pick-up and quality portfolios in select areas continue to witness demand. Xander has committed more than $3 billion in the real estate market, including office, retail and warehousing, since it started investing in India in 2005.

Real estate transactions in residential space have been gaining momentum after the Maharashtra government reduced the stamp duty to two percent from five percent. Property developers are hoping for a further pickup in sales ahead of the festive season. The residential side of the market was facing challenges from sales, funding and regulatory perspectives even before the outbreak of COVID-19 pandemic. However, the segment is showing signs of recovery now.

Xander’s private equity arm has made investments in residential projects in Pune, Bengaluru and Mumbai. In one of the rare land deals transacted on outright basis in 2019, Xander’s retail arm Virtuous Retail South Asia (VRSA) had acquired a prime nearly 20-acre land parcel in Thane near Mumbai from textile major Raymond for $100 million or over Rs. 710 crore. It has also set up an industrial real estate platform for India to invest $250 million in the high growth logistics and e-commerce sector along key industrial corridors across leading Indian cities.