Is leverage / mezzanine funding a double edged sword in project financing?
Is leverage / mezzanine funding a double edged sword in project financing?

Is leverage / mezzanine funding a double edged sword in project financing?

February 27th, Mumbai
Grand Salon Part 1, Grand Hyatt, Kalina, Santacruz - East

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Priya Mathias
Priya
Priya Mathias
Country Head - India, Real EstateGRI Club
+91 98339-45086

OverviewOverview

The fine art of portfolio balance: What really drives the real estate landscape in India today?


GRI Club India members met over a breakfast hosted by GRI Club Partner PwC recently in Mumbai to debate the challenges faced by developers and financiers in the Indian residential sector. The high-spirited discussions centred on evolving business models, single asset vs multi-asset class investment strategies and whether the residential market is in need of a revival.


A summary of the discussion points:

Participants discussed how developers are now largely funded by debt which, from the financiers’ point of view, has resulted in an asset-liability mismatch.

Asset-liability mismatches, as was observed,is not a new phenomenon: in the late 1990s, resulted in a crisis amongst non-banking financial companies (NBFCs) and created liquidity challenges for other financiers holding investments in real estate assets.

The mitigating factor against the asset-liability mismatch today is that there is far more equity capital, although management quality remains an issue. The avenues for sourcing equity financing and recapitalising companies in order to manage risk capital, look much better.

In terms of M&A activity within the sector, it was noted that there has been a  shift towards consolidation, the sale of portfolios and merger deals, although some M&A deals are being drawn out and taking time to complete.

A change in the market has been noticed, with an increase in risks that is affecting the level of equity funding required to acquire assets and the risks valuation metrics have also changed, with an expected decline in future multiples. Participants concluded that funding frameworks had shifted to a new paradigm and that going forward, it was necessary to understand exactly what was the ‘new normal’.

Key executives who are part of GRI community attended the meeting, on behalf of investment banks and funds, advisors, operators and developers, such as Anita Kataria (Raheja Universal), Hari Krishna V (CPPIB - India), Manoj Menda (RMZ Corp), Aditya Chandak (Chandak Group), Sanjay Hinduja (Shapoorji Pallonji Finance), Abdullah Rashed Jasem Al Abdooli (Al Marjan Island), Pradeep Khanna (Reliance Nippon Life Asset Mgmt), and Kaushik Desai (Walton Street).


Timetable
Wednesday, February 27th

9:00 am to 10:00 am | Registrations and Breakfast Networking
10:00 am to 11:00 am | Discussions
11:00 am to 11:30 am | Coffee Networking

Meet our exclusive format

GRI has no speakers, no presentations. Instead, you have a selection of closed-door discussions where everyone can participate.
Much like a conversation in your own living room, the dynamic environment allows you to engage with your peers in an informal and collegial setting.

SponsorsSponsors

Club Partners
Brookfield
CHEC Port City Colombo
Sectoral Club Partners
Al Marjan Island
Ascendas-Singbridge
EverVantage
GAR Corp
JLL
MVIL - Max Ventures and Industries
PwC
www.brookfield.com
India
Asset Management Brookfield is a global alternative asset manager with over US$ 350 billion of assets under management and has a history, of over 100 years, of owning and operating assets with a focus on property, infrastructure, renewable energy and private equity.
http://www.portcitycolombo.lk/about/
India
CHEC Port City Colombo Pvt Ltd. is a RE master developer undertaking planning & development of Port City Colombo. Through China Harbour Engg Company (CHEC), the company is part of China Communication Construction Company (CCCC) which is listed in HKSSE.
https://www.marjanislandresort.com
Marjan is the master-developer of freehold property in Ras Al Khaimah, responsible for path-breaking developments aimed at positioning Ras Al Khaimah as one of the region’s preferred lifestyle and investment hubs. 
Mandated with developing waterfront, urban and mountain destinations that will add to the competitiveness of the emirate, Marjan’s strategic master-planning approach is to leverage Ras Al Khaimah’s natural assets and lay the foundations of the emirate’s future expansions.
http://www.ascendas.com/
http://www.ascendas.com/
+91 80 4188 0000
Bangalore | India
Real Estate Private Funds Ascendas-Singbridge Group is Asia’s leading sustainable urban development and business space solutions provider with Assets Under Management exceeding S$20 billion.

Jointly owned by Temasek Holdings and JTC Corporation through a 51:49 partnership, the Group undertakes urbanisation projects spanning townships, mixed-use developments and business/industrial parks. Headquartered in Singapore, Ascendas-Singbridge has projects in 28 cities across 9 countries in Asia, including Australia, China, India, Indonesia, Singapore and South Korea.

In India, Ascendas-Singbridge specialises in developing, managing and marketing IT parks, industrial & logistics parks, and integrated developments. Leveraging its strong track record and best practices in the region, Ascendas-Singbridge offers a level of service and quality to its tenants which stand way above the rest.
http://evervantage.in/
India
EverVantage is the merger of Disti Advisors & Equa Consulting. With over 25 yrs combined experience spanning markets across India, founders have raised funds for over 100 projects, transacted over 18mn sft & concluded over 50 hospitality transactions.
http://www.garcorp.in/
The Group is a pioneer in the creation of commercial office parks in Hyderabad and is widely renowned for its unique reputation of Build – Lease – Own -Operate model which enables long term ownership of assets.
JLL (NYSE: JLL) is a leading professional services firm specializing in real estate and investment management. JLL, a Fortune 500 company, helps owners, users and real estate investors to achieve their business ambitions. JLL began operating in Latin America 25 years ago. Today, the company has 2,600 employees in the region, 13 corporate offices and operates in 19 countries.
http://maxestates.in/#1
India
Max Ventures and Industries Limited (MaxVIL), a part of the US$ 2 billion Max Group
At PwC, our purpose is to build trust in society and solve important problems. We’re a network of firms in 158 countries with more than 2,36,000 people who are committed to delivering quality in assurance, advisory and tax services.

Advisory Board MembersAdvisory Board Members

Aditya Bhargava
Aditya Bhargava
Senior Portfolio Manager
ADIA
Abu Dhabi Investment Authority has been prudently investing funds on behalf of the Government of Abu Dhabi with a focus on long-term value creation. ADIA manages a global investment portfolio that is diversified across more than two dozen asset classes
Ambar Maheshwari
Ambar Maheshwari
CEO, Private Equity Funds
Indiabulls AMC
Indiabulls Asset Management Company Limited is a privately owned investment manager. The firm manages equity fixed income and balanced mutual funds
Ankur Gupta
Ankur Gupta
MD & Head - India Real Estate
Brookfield
www.brookfield.com
India
Asset Management Brookfield is a global alternative asset manager with over US$ 350 billion of assets under management and has a history, of over 100 years, of owning and operating assets with a focus on property, infrastructure, renewable energy and private equity.
Avinash Sule
Avinash Sule
Director
Qatar Investment Authority
Investment Advisor for investments into Private Equity, Public Equities and Fixed Income into India
Avnish Singh
Avnish Singh
MD & Country Head India
Tishman Speyer
Tishman Speyer is one of the leading owners, developers, operators and fund managers of first-class real estate worldwide.
Irfan Razack
Irfan Razack
Chairman & Managing Director
Prestige Group
Kamal Khetan
Kamal Khetan
Chairman and Managing Director
Sunteck Realty
Sunteck Realty Limited (SRL) is a Mumbai-based real estate development company, catering to the ultra-luxury and luxury residential segment.
Karan Bolaria
Karan Bolaria
Managing Director and CEO
Godrej Fund Management
Godrej Fund Management (GFM) is the real estate fund management arm of the Godrej Group with operations in India and Singapore.
Kaushik Desai
Kaushik Desai
Executive Director
Walton Street
Real estate focussed private equity fund
Manoj Menda
Manoj Menda
Corporate Chairman
RMZ Corp
India's leading corporate real estate developer since 2002, RMZ Corp follows their philosophy of 'Being the Change'.
Mohit Malhotra
Mohit Malhotra
Managing Director & CEO
Godrej Properties
Godrej Properties is a premier real estate company dealing in residential, commercial & township projects & having presence across 12 cities in India.
Nipun Sahni
Nipun Sahni
Partner and Head of Real Estate
AGM India Advisors
Apollo Global Management is a leading global alternative investment manager.
Niranjan Hiranandani
Niranjan Hiranandani
Co-Founder & MD
Hiranandani Group of Companies
Hiranandani is acknowledged for its emphasis on humanizing the urban environment and striking a balance between greenery and concrete. Be it through the flagship business of real estate or its foray into education, healthcare, hospitality, and retail.
Raj Menda
Raj Menda
Corporate Chairman
RMZ Corp
India's leading corporate real estate developer since 2002, RMZ Corp follows their philosophy of 'Being the Change'.
Ramesh Nair
Ramesh Nair
CEO & Country Head
JLL - India
JLL is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying & investing in real estate.
Ritesh Vohra
Ritesh Vohra
Partner & Head - Real Estate
Investcorp
Investcorp is a global asset manager with an AUM of over $22 Bn in alternative investments worldwide, for a growing and diverse client base.
Rohtas Goel
Rohtas Goel
Chairman & MD
Omaxe
Omaxe Ltd is a Indian Listed Co and one of India’s largest real estate companies and has delivered over 100 million sq. ft.
Sanjay Dutt
Sanjay Dutt
MD & CEO
Tata Realty & Infrastructure Limited
Established in 1984, Tata Housing is one of the fastest growing real estate development companies in India. It caters to the demands of luxury and affordable housing, by its portfolio of 36 projects across 11 cities and 3 countries.
Srini Sriniwasan
Srini Sriniwasan
CEO & Country Head
Kotak Investments Advisors
Kotak Realty Fund is a leader and one of the earliest entrants in India’s private equity real estate industry.
Aditya Bhargava
Aditya
Aditya Bhargava
Senior Portfolio ManagerADIA
Aditya is a senior portfolio manager in ADIA’s Asia-Pacific real estate team, with responsibility for ADIA's investments in Indian, Japanese and Korean real estate. He has been with ADIA since July 2012. His primary responsibilities involve managing the Asia Pacific investment team and portfolio by sourcing and executing new investments and building and maintaining relationships in local markets with partners, financial institutions & service providers. In addition to his duties as a member of the Asia Pacific team, he was chair of ADIA’s Real Estate Department’s Task Force for ADIA’s 2017 Global Investment Forum. Prior to joining ADIA, Aditya was the Managing Director for SITQ India. He is a member of the South Asia advisory board of RICS
Ambar Maheshwari
Ambar
Ambar Maheshwari
CEO, Private Equity FundsIndiabulls AMC
Ambar looks after the Private Equity business with a focus on Real estate at Indiabulls AMC. A Chartered Accountant, Ambar brings with him substantial deal-making and structuring experience in the Real Estate sector. Prior to joining Indiabulls AMC, Ambar was associated with JLL as Managing Director, where he successfully ran five businesses including Corporate Finance, Education, Healthcare and Social Housing, Special Development Initiatives and Infrastructure. He had worked with DTZ for over five years profitably leading the Investment Advisory business for India and set up the firm’s presence in West India for other service lines. His non real estate stints as an investment banker included IL&FS, Ambit Corporate Finance and KPMG”.
Ankur Gupta
Ankur
Ankur Gupta
MD & Head - India Real EstateBrookfield
Ankur Gupta is a Managing Director in Brookfield’s Property Group and Head of Real Estate business in India, responsible for all aspects of property business in the country including strategy, investments and asset management.He has held numerous senior roles within the firm. Previously, he was a senior member of Brookfield’s property investments team in New York where he was involved in investments and financings totaling more than $25 billion including IDI Logistics, Capital Automotive REIT, Associated Estates, Rouse Properties and Forest City Realty Trust. He has overseen the establishment and growth of Brookfield’s real estate business in India through three large portfolio acquisitions more than 25 million SF.
Avinash Sule
Avinash
Avinash Sule
DirectorQatar Investment Authority
Avinash has been associated with the Qatar Investment Authority (Advisory Pvt Ltd) for the past 9 years, heading their India Office. He leads the investment efforts in Private Equity and Public Equities across sectors and has been actively involved in Real Estate investment strategies such as residential equity, debt and commercial office.
Avnish Singh
Avnish
Avnish Singh
MD & Country Head IndiaTishman Speyer
Mr. Singh has overall responsibility for Tishman Speyer in India and is based in Gurgaon. He joined Tishman Speyer in 2010 as Head of Acquisitions from GE Capital Real Estate where he was responsible for the development and execution of GE Real Estate’s India equity and debt investing platform, encompassing equity joint ventures with local partners, construction financing and corporate loans to developers. From 2003 to 2006, he was with Jones Lang LaSalle’s Asia Capital Markets team based in Singapore, responsible for cross-border equity investing advisory in India and Southeast Asia.
Irfan Razack
Irfan
Irfan Razack
Chairman & Managing DirectorPrestige Group
Irfan Razack, the eldest son of Razack Sattar, is at the helm of the Prestige Group. A born leader, Irfan is blessed with the acumen to see opportunities where none apparently exist, the courage to take the untrodden path and the determination to see his vision through to fruition. His leadership acumen received national recognition, when he was declared Professional of the Year at the Real Estate Excellence Awards 2008. He has been Honorary Secretary of the Al Ameen Educational Society for 22 years, the President of Bangalore Commercial Association (BCA) and served as President of KOAPA (now CREDAI Karnataka) for 4 years and currently is the Vice President CREDAI, India.
Kamal Khetan
Kamal
Kamal Khetan
Chairman and Managing DirectorSunteck Realty
Kamal Khetan, CMD Sunteck Realty Ltd. is a first generation entrepreneur who founded the Group in 2000. His vision is depicted in being the foremost to anticipate an opportunity in the premium residential space of 4 acres in India’s most promising commercial hub - Bandra Kurla Complex, Mumbai. These high end properties of BKC today hosts the top business honchos making it one of the most prestigious and Iconic project in the country. Mr.Khetan has also identified places like Goregaon & Airoli and invested to develop spaces to cater the needs of the customers. Under his Leadership, Sunteck Realty today manages a development portfolio catering to the ultra-luxurious and Premium segment of over 23 mn.sq.ft spread across 25 projects.
Karan Bolaria
Karan
Karan Bolaria
Managing Director and CEOGodrej Fund Management
Karan Bolaria is the Head of Godrej Fund Management. He is responsible for the fund management business that includes overseeing all investment, asset management and exit activities. He holds an MBA in Finance and a MSc. from Columbia University.
Kaushik Desai
Kaushik
Kaushik Desai
Executive DirectorWalton Street
Kaushik Desai is currently Executive Director of Walton Street India, handling key relationships with investors, funds, intermediaries and developers. He is responsible for helping evaluate new investment opportunities and instrumental in reviewing and advising on transaction structures. He is a Chartered Accountant and a Company Secretary and has a bachelor’s degree in commerce from the Mumbai University.
Manoj Menda
Manoj
Manoj Menda
Corporate ChairmanRMZ Corp
Manoj Menda is the firm’s Corporate Chairman. He leads the firms Executive Committee and sits on the Investment Committee. Responsible for the strategic client and business relationships globally. He contributes to business development and transaction strategy. He serves on the Investment and Advisory Committees of all RMZ private fund programs. Founder and Trustee of RMZ Foundation whose vision is to actively contribute to the social and economic development of the communities in which we operate.
Mohit Malhotra
Mohit
Mohit Malhotra
Managing Director & CEOGodrej Properties
Mohit Malhotra is the Managing Director and CEO of Godrej Properties Limited (GPL).He joined Godrej Properties in 2010 and has been instrumental in the company’s growth since then. He first headed business development for the company and has taken on larger leadership responsibilities that currently include heading GPL’s pan-India operations. Mohit was appointed to GPL’s Board of Directors as an Executive Director in 2015. Under his leadership, the company added 41 new projects adding to 61 Mn Sq. ft. As the Head of North Business, GPL became the market leader in Gurgaon and Godrej Properties became the largest listed player by booking value in the country. Mohit is responsible for further strengthening the growth and development portfolio.
Nipun Sahni
Nipun
Nipun Sahni
Partner and Head of Real EstateAGM India Advisors
Nipun joined Apollo in 2015 in AGRE Delhi and is responsible for Real Estate Investments in India. Prior to that time, Nipun was the Founder of Rezone Investment Advisors from March 2011 to April 2015. Prior to that, Nipun was a Managing Director in the Real Estate Investment Group at Merrill Lynch from 2006 to 2010. Prior that Nipun was a Managing Director at GE Capital, India. Nipun currently serves on the advisory boards of Royal Institute of Chartered Surveyors in India. Nipun previously served on the APREA & USIBC Committees. Nipun graduated in Commerce from Delhi University with a B.Com. degree and received his Masters degree in Finance from the MFC Program at University of Delhi.
Niranjan Hiranandani
Niranjan
Niranjan Hiranandani
Co-Founder & MDHiranandani Group of Companies
Niranjan Hiranandani is arguably, India’s ‘builder extraordinaire’, the person credited with changing Mumbai’s skyline. Niranjan Hiranandani has virtually revolutionized the real estate industry in the country. Since then, the Hiranandani Group has come a long way and is recognized for their modern state of the art mixed used township projects in Powai & Thane, both of which have become preferred residential and commercial locations in and around Mumbai. Mr. Niranjan Hiranandani is a Business Leader with a combination of qualities like sharp professional business acumen, concerned citizen with social awareness, Industry leader with up to date knowledge, and above all, ensuring that the company gives value to every Customer.
Raj Menda
Raj
Raj Menda
Corporate ChairmanRMZ Corp
Raj Menda is the Co-Owner & Corporate Chairman of RMZ Corp. RMZ Corp is one of the most successful South Asian real estate development firms, with an unmatched portfolio in India. The organization has developed, acquired or holds an interest in over 24 M sft. of commercial properties. Its prestigious and prolific portfolio includes over $ 3 billion in real estate assets. Headquartered in Bangalore. At RMZ, we are constantly thinking about the Future. This time it’s about the Future of Space and we have chartered our course to look at creating communities. In our new manifesto we are using technology coupled with experiences to build connected communities in our spaces.Raj is the first Indian to be on the Jury of the ULI Awards
Ramesh Nair
Ramesh
Ramesh Nair
CEO & Country HeadJLL - India
Ramesh is the CEO & Country Head of JLL India. He is responsible for the overall direction, strategy and growth of the firm in India. JLL is largest real estate services firm in the country with more than 9,600 diverse professionals, with business revenues nearing INR 3,200 crores in 2017-18. JLL is also the market leader in terms of market share, revenues, profitability and team size for all the business lines in India. Prior to taking over the role of CEO & Country Head, he has held positions such as COO - India, MD - West India, India Head of Land, South India Markets Head, MD - Chennai, MD - Hyderabad and MD - Industrial.
Ritesh Vohra
Ritesh
Ritesh Vohra
Partner & Head - Real EstateInvestcorp
Ritesh has been a financier, advisor and entrepreneur over the course of his real estate career, and has been associated with a number of property developments across India. He moved to Investcorp in early 2019 as a result of its acquisition of IDFC Alternatives’ Real Estate platform, and heads the real estate funds management business for India. Prior to Investcorp, Ritesh worked as a Partner with IDFC Alternatives and previously as an MD at real estate fund manager Saffron Advisors. He has been a past member of the CII National Committee on Real Estate. He is also a member of the Royal Institution of Chartered Surveyors, United Kingdom (RICS).
Rohtas Goel
Rohtas
Rohtas Goel
Chairman & MDOmaxe
Rohtas Goel, Chairman and Managing Director-Omaxe Ltd., is a leading name in the real estate industry in India. Rohtas founded Omaxe 25years back and has steered the group to an unprecedented height. In 2007, Omaxe got listed on Indian bourses (BSE and NSE) and within a short span, the company emerged as one of the largest real estate companies marked by some renowned and highly appreciated projects. Omaxe has delivered over 101 million sq. ft. in both real estate and construction contracting and the group is presently executing 39 real estate projects across various verticals. Today, the group has its presence in 27 cities and 8 states like Uttar Pradesh, Haryana, Punjab, Madhya Pradesh, Rajasthan, Himachal Pradesh, Uttarakhand and Delhi.
Sanjay Dutt
Sanjay
Sanjay Dutt
MD & CEOTata Realty & Infrastructure Limited
Sanjay has over 24 years of experience in the real estate sector. Sanjay was previously the CEO of Ascendas-Singbridge’s India Operations and Private Funds. He was responsible for creating a positive cultural change enabling accelerated growth through acquisitions of 5 new opportunities and redevelopment of existing parks adding 16 million sft. in less than 2 years. His role included green field developments and asset management business spread across 5 cities in India with over 13 million sft of predominantly IT SEZ/ Parks. He also managed an 1100 acre Industrial Township and assisted the Group with the acquisition of 1700 acres start up area in the new capital city of Amaravati, Andhra Pradesh.
Srini Sriniwasan
Srini
Srini Sriniwasan
CEO & Country HeadKotak Investments Advisors
S. Sriniwasan (Srini) heads Kotak Investment Advisors Limited (KIAL), a wholly owned subsidiary of Kotak Mahindra Bank, since January 2017. Under Srini’s leadership, Kotak Realty Fund has scaled up to over US$1.47 billion in AUM, making it one of the largest real estate funds in India, and has successfully established a strong track record of profitable exits from investments. As one of the earliest fund managers to raise and invest capital in India’s alternate assets space, Srini has introduced significant financing, financial structuring and negotiating skills in the industry. Srini holds a Bachelor’s degree in Commerce from Delhi University and an MBA from the Institute of Management Technology (IMT), Ghaziabad.
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