Certus Capital, an institutional real estate investment and advisory company founded by former KKR director Ashish Khandelia, has invested a significant amount of Rs. 130 crores in two prime commercial real estate projects in Pune. The investment is a part of the company’s secured bonds platform, Earnnest.me.
Projects Developed by Mittal Brothers
The two projects, located in sought-after city-centric locations in Pune, are being developed by Mittal Brothers, a prominent Pune-based developer with a commendable track record. Mittal Brothers has successfully completed 26 projects spanning over 65 lakh square feet in the last 25 years.
High Connectivity and Developed Infrastructure
The projects chosen by Certus Capital boast excellent connectivity and developed social infrastructure, making them ideal for commercial development. The location of these projects ensures convenient access for both employees and customers.
Robust Sales and Leasing Opportunities
One of the projects, which is relatively advanced, has already seen significant interest in terms of both leasing and sales. The retail levels of the development have been successfully occupied by renowned brands such as Pantaloons, McDonald’s, Max, and Nonna’s pizza chain.
15% Fixed Return IRR with Principal Cover
The investment made by Certus Capital takes the form of secured debentures and offers an approximate 15% fixed return internal rate of return (IRR). Furthermore, it provides significant principal cover through underlying cashflows, ensuring a secure investment for the company.
Overall Objectives of Certus Capital
The recent investment aligns with Certus Capital’s objective of investing Rs. 500 crores by the end of FY24. Additionally, the company aims to achieve over Rs. 1,000 crores of investment through Earnnest.me in FY25. This commitment demonstrates Certus Capital’s confidence in the real estate sector and its dedication to supporting its growth.
Ashish Khandelia, the Founder of Certus Capital, expressed his delight in the investor response received for the opportunities presented by Earnnest.me. Khandelia emphasized the importance of developing India’s bond markets and recognized the crucial role these markets play in capital-intensive sectors such as real estate. Certus Capital aims to act as a market maker for real estate debt capital markets through its investment platform, Earnnest.
Expansion in Pune’s Office Market
Pune’s office market has experienced a surge in activity in recent times, attracting substantial interest from investors. Mittal Brothers, leveraging their 25+ years of real estate experience, bring their expertise to city-centric commercial projects like “One Place” in Pune. This investment by Certus Capital marks the 4th and 5th projects in this segment.
Impressive Track Record of Certus Capital
Since its establishment in 2018, Certus Capital has carefully evaluated over Rs. 40,000 crores worth of real estate credit exposure from NBFCs and housing finance companies. The company has successfully advised foreign institutional investors on nearly Rs. 10,000 crores of closed investments in real estate credit and warehousing space. Over the past three years, the company has generated over $2 billion of real estate credit opportunities, offering attractive secured returns of approximately 18%.
Success of the Earnnest.me Platform
In February 2022, Certus Capital launched the secured debt investing platform, Earnnest.me, with a primary focus on real estate. The platform garnered exceptional investor interest, with a remarkable 70% repeat investment rate. The participating investors enjoyed timely interest payouts, with a net pre-tax return ranging from 14% to 16%.
Promising Investments and Strategic Exits
In January 2024, Earnnest.me reached a successful exit from its maiden investment in the affordable housing sector. The investment delivered its promised 16.1% net return one year ahead of the scheduled maturity, attributed to the strong performance of the project. Additionally, Earnnest.me consolidated its position in the premium boutique residential project by acquiring its 50% partner’s share in the investment. The platform also recently engaged in a repeat transaction with another existing partner, leveraging its proprietary deal access. Certus Capital’s recent investment in prime commercial real estate projects in Pune exemplifies its commitment to supporting the growth and development of the real estate sector. With a strong and experienced team at its helm, Certus Capital aims to continue capitalizing on lucrative investment opportunities while contributing to the expansion of India’s bond markets.
