Brick Eagle Capital Advisory, a real estate investment firm, is going to raise about Rs 700 crore for an affordable housing fund to help government develop low and middle income housing. This will be the third pool of capital raised by this private equity company.
Currently, the company is planning to utilize the fund in the top 20 cities across India with a target of developing 100 homes at the cost of Rs 1 crore per house for Low Income Group (LIG) families. Furthermore, the fund will be invested on the projects which are at the pre-approval stage and later, managed by another arm set up by Brick Eagle group. The investment will have a fixed yield ranging from 25-30 per cent.
Brick Eagle has laid out its estimation according to the government’s plan of Housing for All Vision by 2022. Out of proposed $100 billion spent on developing 5 million houses annually, $10 billion is needed for financing land and approvals at the pre-launch stage of the project. Debt financing will be another source to fund $10 billion. Home financing and funds collected from buyers will suffice to cover rest $70 billion.
With a plan to build 1 million housing units by 2030, the company looks at multiple affordable housing projects for structured investments that should be recovered in 2-4 years. It has a land bank of nearly 1,000 acres.
“We are talking to a couple of family offices who have given us soft commitment for the initial 510%, so initial 200 crore will come from people we already know and eventually we will raise more funds from HNIs both domestic and foreign,” says Kirti Timmanagoudar, Managing Partner, Brick Eagle India Affordable Housing Fund.
Source: ET Realty