Certus Capital, an institutional real estate investment and advisory firm, is looking to invest Rs 1,000 crore through secured credit in the real estate sector in India over the next year, said a top company executive.
The firm, founded by former KKR director Ashish Khandelia, has already invested close to Rs 400 crores for its secured bond platform, Earnnest.me, and expect to close the year with aggregate investments exceeding Rs 500 crore.
Started in 2018, Certus Capital has advised institutional investors on investments in Indian real estate worth nearly Rs 10,000 crore and is now looking to focus on its investments through its own platform, which it started two years ago.
“We believe it is imperative for India to develop its bond markets to achieve the true potential of our economy. And it is even more important for capital-intensive sectors such as real estate. Through Earnnest, Certus Capital is playing the role of a market maker for real estate debt capital markets,” Khandelia told ET.
Certus Capital’s latest transaction includes an investment of Rs 130 crore in two commercial real estate projects of realty developer Mittal Brothers in Pune for its secured bonds platform.
The investment, in the form of secured debentures, is expected to generate around 15% fixed returns with significant principal cover through underlying cash flows. Both projects hold a revenue potential of Rs 800 crore.
One of these projects on Fergusson College Road with 260,000 sq ft space is in a reasonably advanced stage of construction and is receiving last-mile funding from Certus. The project has witnessed significant sales and leasing interest, with nearly 80% of it already sold or leased. The project’s retail levels are operational and occupied by brands such as Pantaloons, McDonald’s, Max and Nonna’s pizza chain.
The other project is spread over a land parcel of an acre on Bundgarden Road with a development potential of 300,000 sq ft. This is an early-stage investment made to support land-related activities and approvals.
“The deal pipeline is strong and the property market is performing well across segments, propping up confidence in the sector. The latest investment in Pune is in line with our aim to invest Rs 500 crore in the current financial year,” Khandelia said.
In January, Earnnest.me exited its debut investment in the affordable housing sector with a 16.1% net return, one year ahead of the scheduled maturity, given the robust performance of the project.
It has also consolidated its position in the premium boutique residential project of realty developer EON Group in Mumbai’s Prabhadevi by buying out its 50% partner in that investment. Recently, it also made a repeat investment in a residential project in Chennai, capitalising on its proprietary deal access.
Earnnest.me is aiming to democratise access to institutional-quality investment opportunities, make them affordable to individuals and help increase risk-mitigated returns.
