Improved sentiment in the real estate sector has resurrected the investor confidence. Fire Capital, a global private equity fund that invests in real estate projects, has decided to invest close to $500 million (Rs 2,500 crore) over the next five years.
“If we get good land deals we will invest at the rate of $100 million in a year over the next five years,” said Om Choudhry, CEO, Fire Capital Fund Pvt Ltd. “We are targeting an internal rate of return (IRR) of between 25 and 30 per cent on our investments.”
The private equity player that on Sunday launched its project in Nagpur has prepared a roadmap for its investments in the sector going forward.
The company would be investing into projects in the tier II cities unlike many other private equity investments in the real estate sector that go into buying stakes into the real estate companies.The company plans to launch projects in cities like-- Bhubaneshwar, Ahmedabad, Ludhiana, Amritsar and Trichy among others.
Even though the property prices corrected between 30 per cent and 35 per cent over the past 18 months the rise may not be immediate and swift, “I do not see a rise in the property prices over the next six months,” said Choudhry.
While the budget is round the corner and the industry is looking set for next leg of growth there are several relaxations that the industry is looking for itself from the government. “We want infrastructure status for the real estate sector and want tax breaks for specific projects that focus on affordable housing of a significant magnitude,” said Choudhry.