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Sowparnika Projects: Walton Street Blacksoil Real Estate Debt Fund II invests Rs 165 cr in Sowparnika Projects

Alternative investment platform, Walton Street Blacksoil Real Estate Debt Fund II (WSBREDF – II) has invested Rs 165 crore in Sowparnika Homes Private Limited (Sowparnika Projects) for a portfolio of projects across Bangalore.

These projects cater to the mid-income and affordable segment with an average ticket size of Rs 50 lakh and are located near key employment centres and IT Hubs such as Sarjapur Road, Whitefield, and Old Madras Road amongst others.

“This is the biggest investment made by WSBREDF II and we will facilitate the delivery of 2750 homes in the above category,” said Vimal Jangla, Managing Partner, Walton Street India Real Estate Advisors.

Sowparnika has delivered more than 5 mn sqft having more than 7,500 homes in this segment and currently has 4,500 more homes spread across 4 mn sq ft under development in Bangalore.
“Our partnership with Walton Street Blacksoil will help us deliver high-quality value homes and timely delivery of apartments to end users in affordable and mid-income segment. We are aligned with the Prime Minister’s Housing for All scheme,” said Ramji Subramaniam, Promoter of Sowparnika Projects.

In some of the recent deals, WSBREDF – II, has invested over Rs 105 crore in two under-construction mid-income housing projects of Pune-based realty developer Paranjape Group. The venture debt fund has also invested Rs 110 crore across two housing projects -Krishnaiah Projects, part of the Bollineni group and Jain Housing and Construction for projects located in Chennai and Hyderabad.

“WSBREDF II has already crossed its target fund size of Rs 500 cr and stepped into the green shoe. The fund is expected to close shortly. We have seen active participation from notable stakeholders, including large family offices, corporates, offshore investors, and HNIs. With this investment, two-thirds of the target fund size has already been committed across seven investments,” said Jangla.

The fund will focus on investing, through structured debt, in residential real estate projects serving the mid-income and affordable housing segment across select tier-I cities and look to partner with developers with robust execution and delivery track record.

Walton Street BlackSoil Real Estate Debt Fund has made six full exits and three partial exits worth across multiple investments with the real estate development arm of Bollineni Group, Puravankara, and Saket, amongst others from its first fund.

“We returned over 105% of the capital to our investors in terms of principal plus interest and the remaining exits shall mature over the next 18 months,” he said.

These investments were spread across multiple residential projects located in the southern metropolitan cities of Bangalore, Hyderabad, and Chennai. All these projects cater primarily to the mid-income segment situated in prime areas of these cities,” said Jangla.

WSB, an Alternate Investment platform jointly held by the ex-India management team of Walton Street (Kaushik Desai, Vinit Prabhugaonkar, and Vimal Jangla) and the Blacksoil group, have been investing in the Indian Real Estate space since 2008-09.

WSB and its affiliates have managed or committed more than Rs 1750 cr (USD 230 mn) of debt capital in residential real estate. Spread over 5 metros and across about 40 transactions, the group has already secured 27 complete and 5 partial exits from this investment corpus.

According to Colliers, overall, total investments in the Indian real estate touched $3.6 bn during January-September 2022, registering a hike of 18% YoY. “The trend in residential sales is reflective of positive long term structural change in the sector. Investments in India are getting more broad based with increased participation from domestic investors,” said Piyush Gupta, Managing Director, Capital Markets and Investment Services, Colliers India.

Residential real estate performance has surpassed pre-pandemic levels and reached a new high during the July-September quarter, owing to a sustained resurgence in demand despite rising interest rates. The aggregated sales for the first three quarters of fiscal year 2022 are 16% higher than the comparable aggregated sales for the first three quarters of fiscal year 2021, mentioned Colliers and CREDAI.

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