Brick Eagle to set up social housing fund; to raise $50 mn

MUMBAI:Private equity firm Brick Eagle plans to create a special ‘social housing fund’ and raise $50 million this fiscal through development institutions and corporates to fund houses costing up to Rs. 10 lakh.

The PE firm is also planning to pick up stakes in realty firms focused on the affordable segment in various states, Brick Eagle Managing Director and CEO Rajesh Krishnan said.

After the government announced its ‘Housing for all 2022’ initiative, many development institutions and corporates want to participate in the initiative by funding affordable housing projects, Kishnan told PTI.

“We have planned to set up a separate social housing fund which channelises funds from such institutions and firms, and all the formalities for setting it will be soon completed and it will raise nearly $50 million to begin with,” he said.

“So far we have been raising funds through commercial investors who expect almost 3x returns on their investments. But there are few corporates and development institutions not keen on higher returns but want to participate in the initiative to create affordable housing,” Krishnan said.

An institution such as the International Finance Corporation (IFC), a member of the World Bank Group, has a corpus of $1 billion which it wants to invest in affordable housing projects, he said.

“Australian bank Westpac is also keen on investing in India and is in talks with us for the same. They have a corpus of $2 billion, but have been waiting for the right partner to channelise the funds in such social causes,” he said.

Besides, there are a few corporate houses that are not looking at higher returns but are satisfied with around 1x or no return on investments, but are keen on participating as a part of their corporate social responsibility (CSR), he added.

“We plan to invest the funds in projects meant for the economically weaker sections (EWS) with prices up to Rs. 10 lakh. We may also invest in projects where the developer would give us 20 per cent of built- up housing stock in exchange for land that we buy for developing affordable homes. However, we are yet to finalise on our investment plans,” Krishnan added.

He said the PE firm is also planning to pick up stakes in realty firms focused on the affordable segment to increase its presence in states such as Maharashtra, Tamil Nadu, Gujarat, Karnataka, Kerala and Rajasthan.

The Hong Kong-based firm has already acquired a stake in developers including DBS, Playtor, Olympeo, Sheltrex, and is now looking at acquiring six more to enter states such as Rajasthan and Karnataka this fiscal.

Brick Eagle has also invested in companies that aid the affordable housing sector such as TPC, a construction technology company; Phalcomm, an online house selling platform; Renderlogy, a technology driven online interior design and supplier community; Xeco, a real estate marketing company; and Botsworth, a company using robotics for township management.

It manages over 30 million sq ft of affordable housing projects, which are at various stages of development.