Red Fort Capital has invested $26 million in equity in the development of a 300,000 square foot office block in New Delhi, its home town.
The firm, which is currently at the tail-end of the investment period of its first private equity real estate fund, Red Fort India Real Estate Fund 1, is to team up with Parsvnath Developers, one of the country’s established development companies, also based in New Delhi.
The firm said in an announcement on the deal that it hoped to tap into pent-up demand from occupiers in the city’s “supply-constrained” central business district.
The project, to be called Red Fort Parsvnath Towers, is to be developed on a 5-acre plot. It was granted planning consent in conjunction with a Delhi Metro Rail Corporation concession agreement, which will see private investment into the local railway infrastructure.
The deal is the latest in Red Fort’s strategy of investing in India’s tier one cities. The firm has invested more than 80 percent of Red Fort India Real Estate Fund 1, for which it is reported to be on course to deliver an IRR of more than 20 percent. It is currently in the market on its second fund, for which it is seeking to corral more than $400 million.
Parsvnath has developed assets across 45 Indian cities. The firm has developed an array of real estate including integrated townships, housing, commercial assets, IT parks and hotels. The firm currently manages approximately 194 million square feet of assets.