Red Fort Capital Invests in Delhi-NCR Residential Market

Port Louis, Mauritius–Red Fort Capital has recently closed two residential transactions in the Delhi-NCR region of India on behalf of Red Fort Fund II, the investment manager’s second fund. The amount, which remains undisclosed, was invested in a project called Esencia Phase II, a 108-acre affordable housing development located in Gurgaon. The other project is Delhi Heights, a 38-acre mixed-use project set to be constructed in the heart of Delhi.

Esencia Phase II is part of the fund’s joint venture with Ansal Properties & Infrastructure Ltd, a realty and infrastructure company based in Delhi, in which Red Fort has picked up a 26 percent stake for Rs 200 crore. The project is located in Premium Sector 67 in Gurgaon and  is expected to be launched in May. Apart from the over 5 million square feet of row homes and villas, the development will have a 2.76-acre commercial complex with retail and recreational space.

Parry Singh, managing director of Red Fort Capital, says that the residential projects have reached advanced execution stages. For Esencia Phase II, sales and construction have already started, while the design and construction for the Delhi Heights development has just been finalized. This project will include over 2,000 premium residential units, 30-50 story towers and a series of mixed-use amenities.

According to Subhash Bedi, managing director of Red Fort Capital, the investment strategy for Fund II is a continuation of the concept used for Fund I, whose highlight was the residential development. Bedi also announced that over 70 percent of the portfolio has been residential and strategically located office and mixed-use projects.

In Singh’s opinion, Red Fort’s investment plan in Delhi brings a highly conservative approach and strong long-term relationships with existing and prospective development partners.

Red Fort Capital had already closed two deals in the last five months. In October 2010 the investment fund picked 24.5 percent stake in an office center developed by Parsvnath Developers Ltd in Delhi’s central business district called Connaught Place for Rs 120 crore. In the next month, Red Fort Capital joined Parsvnath Developers Ltd again in a 5 million square-foot development of residential and mixed-use units on a 38-acre parcel in the proximity of Connaught Place.