Milestone Capital Advisors, a Private Equity Firm has acquired over half of an IT park building in Kharadi Business District of Pune for an astronomical figure of over Rs 160 crore.
Established in 2007, Milestone Capital Advisors is a private alternative investment advisory firm in India. Investors of Milestone comprise of institutions, family offices, government organizations & high net-worth individuals in India and abroad. Its Board of Directors has industry’s big shots that are the company’s main source of high standards of corporate governance. With over 150 years of experience in combined investment management , their teams apply their experience to ensure that the investors’ interests and objectives are thoroughly pursued always. Milestone has dependably depended on growing innovative funds in real estate, which have given special opportunities and in addition consistent returns to the investors. Having an astounding distribution platform containing driving MNC and Private sector banks in India and abroad, Milestone continually maintains its reputation to give better servicing standards to its investors.
The South Wing of E-Park, which is a part of Kharadi IT Park and promoted by Maharashtra Industrial Development Corporation (MIDC) has been purchased by the Private Equity firm. The building is next to EON IT Park and a total of 2.30 lakh sq ft office space is leased out which houses multinational companies. The leased out office space witness periodic rental increase. This transaction leaves Milestone with an entry yield of around 9.5% to the property.
According to Sandeep Chadha, Partner at Milestone Capital Advisors, the funds for this investment was made available from mixed source of debt and equity. The borrowing costs being much lower, it generates a positive arbitrage of around 100 basis points.
Milestone, through its fourth Private Real Estate Investment Trust (REIT), called Milestone Commercial Advantage Fund, has made its second investment in this property.
Sunil Bharti Mittal’s Telecom Operator Company, Bharti Airtel, wins the north wing of E-Park. The Capital, a commercial building in Mumbai’s Bandra-Kurla Complex, was the first investment made by Milestone Commercial Advantage Fund in June.
However, the latest investment elevates the fund’s total obligation in pre-leased assets in India to Rs 200 crore. Institutions, high net-worth individuals and family offices support the fund. Accordingly with this investment, the fund is expecting to generate a yield of close to 20% on a gross level.
Mr. Chadha said that the company is evaluating and in the process of undertaking due diligence of other Mumbai and Bengaluru assets and there is a possibility of these transactions being finalised soon as the company is in advanced stage of discussions with owners of these assets. He said the scenario of commercial real estate investment in India is consistently rising and resources are open to be invested in sustainable value propositions. Outlook is positive when their target investment segments of pre-leased commercial assets are concerned. In the first six months of this year, there has been 50% more retention in the industrial and warehousing segment, sponsored by strong macro-economic essentials. He also says that the average ticket size for offices has leaped from 50,000 sq ft to 65,000 sq ft. So reaching to a final conclusion it can be said that things seem to be brighter.
In the following one year, Milestone Capital is planning to deploy almost around Rs 1,000 crore in pre-leased commercial assets through Milestone Commercial Advantage Fund. By the end of March 2018, the PE player through this fund is looking forward to raise at least Rs. 700 crore in equity.
