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Blog December 2, 2014

PE Fund Premji Invest Makes First Real Estate Bet.

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Private equity firm Premji Invest has invested Rs 70 crore in Bengaluru-based property developer Total Environment in its first bet in real estate that underlines the potential of the sector as Asia’s largest family office, owned by IT company Wipro’s billionaire chairman Azim Premji, seeks to maximise returns by diversifying its portfolio investments.

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Premji Invest has bought more than 10 flats or 10% of the total houses in a current project of Total Environment, according to a senior executive of the developer.

“This is our first engagement with Premji Invest and we hope it does not remain a one-off thing,” said Kamal Sagar, chairman and managing director of Total Environment Building System, without disclosing the details of the investment.

Premji Invest has bought more than 10 flats or 10% of the total houses in a current project of Total Environment, according to a senior executive of the developer.

“This is our first engagement with Premji Invest and we hope it does not remain a one-off thing,” said Kamal Sagar, chairman and managing director of Total Environment Building System, without disclosing the details of the investment.

Other people familiar with the matter, however, told ET that Premji Invest earlier this year made the investment in the third phase of Windmills of the Mind project in Whitefield city suburb which is home to several technology parks. The project has about 108 duplex apartments of 6,000-8,000 square feet, with an asking price of about Rs 6 crore for each unit. The current phase is expected to be completed by 2016.

“We will help them sell the flats as this investment is done more for making money on their investment,” said Sagar.

The developer says that the project is among the finest luxury complexes in the country as it offers fully customised offerings and believes there is a lot of pent-up demand for such projects in the city that is home to a rising number of dollar millionaires.

We have no plans of buying real estate,” said a senior executive of Premji Invest, adding that the current investment has been made to seek returns once the project is completed.

Premji Invest manages over $2 billion of Azim Premji’s personal wealth by investing in capital markets and picking minority stakes in start-ups, including homegrown e-commerce companies such as Flipkart and mobile payment companies such as Chennai-based Financial Software and Systems.

India’s third richest businessman, Azim Premji is estimated by Forbes to have wealth of over $16.4 billion.

Until now, Premji Invest has deployed more than 60% of its total cash in capital markets, buying stocks of firms in the consumer business including Bata and Hindustan UnileverBSE -0.14 %, and investing another 30% in picking minority investments in start-ups. Last month, the family office investedRs 350 crore to pick a minority stake in payments processing and technology company Financial Software and Systems.
Premji Invest’s strategy of maximising returns by backing a single real estate project is unlike that of its peers like former Infosys CEO SD Shibulal, whose family office has built a healthy real estate portfolio by buying residential and commercial properties from Seattle in the US to Germany and India.

Via : ET
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