DMI AIF has a nine-year life and will make special opportunity investments into structured debt and equity in real estate companies
DMI Alternatives Pvt. Ltd.(“DMI Alternatives”), anassociate company of DMI Finance Pvt. Ltd.(“DMI Finance”), announced the
closure of the 2nd Scheme of DMI Alternative Investment Fund (“DMI AIF”). The scheme achieved a final close at a capital commitment of USD250mn. (INR 1,600 Crore). It has a nine-year life and is designed to make special opportunity investments into structured debt and equity in real estatecompanies with a view to achieving capital appreciation for its investors. The fund expects to make between 15to20 investments in Indian companiesholding assets ranging from land to built- upinventory. It will also consider portfolio level investments and is currently evaluating a few such opportunities.
Along with announcing the closure of the 2nd Scheme of DMI AIF, DMI Alternatives also announced a strategic partnership between DMI AIF and Stellar Ventures(“Stellar”), a NOIDA-based real estate developer. DMI AIF, alongwith Stellar, has investedin Indian entities which havepurchased and plan to develop three parcels of commercial (IT/ITES) land in Sector 142, NOIDA, totaling almost 10 acres and more than 1.3 million square feet of leasable space. While these are the first investments closed by DMI AIF, DMI Alternatives is in the late stages of evaluating several other opportunities and expects to complete those in the coming weeks.
Delhi-based law firm, Amicus, led by partner Shivi Agarwal, acted as legal counsel to DMI AIF for these investments.
Shivashish Chatterjee, Director of DMI Alternatives, said, “After many years,real estate equity appears to provide an interesting investment opportunity. Widespread stress from a slow sales environment and a stronger regulatory regime ushered in by RERA and the NCLT are forcing asset sales. We think that, for patient capital,equity in real estate can be underwritten to more attractive returns than debt.”
Yuvraja Singh, Director of DMI Alternatives,said, “The prolonged slowdown in the real estate sector has forced buyers to become much more discerning. This shift, coupled with the introduction of the Real Estate Regulatory Act, which places stiff penalties on developers for delaying projects and diverting funds, has created an ideal environment for acquiring prime assets at attractive valuations and teaming up with high quality partners to develop these assets. We are excited to be working with Stellar and look forward to a long and fruitful relationship.”
Akshay Sethi, Director of Stellar, said, “Stellar has developed 1.5 millionsquare feet of IT/ITES office space and we are very happy to partner with the DMI AIF in expanding our portfolio of professionally-managed, high-quality commercial (IT/ITES office) spaces. The new buildings are extremely well located on the NOIDA Expressway, all within walking distance of the upcoming metro station. We are designing the buildings with a lot of ‘Green’ concepts that will provide a superior work environment to our tenants.”