The real estate arm of US buyout firm Apollo is set to invest $2 billion (€1.54 billion) in property in India through a joint venture with a local group.
Apollo Real Estate Advisors has teamed up with SUN Group, a local Indian investment company, to raise a $630 million fund. With debt, this could mean the venture has around $2 billion of firepower to invest in the region.
The two firms started fundraising in April last year and held a first close in August. It has attracted a global spread of institutional investors and high-net worth individuals.
The SUN-Apollo Real Estate Fund is the latest attempt by Western investors to cash in on India’s booming real estate market. The firm said: “The dramatic growth in India’s economy is generating significant demand for all forms of real estate, ranging from offices to shopping centres to residential developments to hospitality, well in excess of existing supply.”
Starwood Capital, a leading US real estate investor, has also recently set up shop in India. Founder Barry Sterlicht told Reuters that his firm would spend $500 million in the country over the next three years.
Apollo and SUN initially teamed up last year to buy a 50 percent stake in a 58-acre land development project near Chennai, for about $200 million. The development, which included commercial and residential property, was done by local firm Sriram Properties. This investment will be rolled into the fund.
SUN is an Indian investment group owned by the Khemka family. Its previous private equity experience includes SUN Brewing/SUN Interbrew, which developed into the twelfth largest beer company in the world.