On Thursday, Walton Street BlackSoil Real Estate Debt Fund II (WSBREDF-II) announced it received commitments of Rs 360 crore for the first closing of its Rs 500 crore fund. Additionally, the fund has a green-shoe option of Rs 250 crore.
With a target security cover of more than twice that focuses on middle-income residential real estate projects across key tier-I cities of Bangalore, Hyderabad, Chennai, Mumbai, Pune, and Delhi/NCR, the debt fund plans to fund the generated funds in self-liquidating senior secured debt instruments. The debt fund is listed with India's Securities and Exchange Board (SEBI) as a category II Alternative Investment Fund (AIF).
Lately, BlackSoil and the former India-based management team of US real estate investment advisor Walton Street Capital merged strengths to acquire Walton Street India's real estate debt business. Kaushik Desai, Vinit Prabhugaonkar, and Vimal Jangla manage the Indian management team.
In 2018, Walton Street BlackSoil Real Estate Debt Fund I (WSBREDF-I) was thrust with allocated capital of Rs 320 crore. It was thoroughly expanded earlier this year, across ten investments in the key metros of Bengaluru, Hyderabad, Mumbai, more than 50 percent of which has been returned. WSBREDF-I has invested in marquee developers like Cybercity, Bollineni, and Saket, amongst others.
The affordable and mid-income residential segment is estimated for more than half of the new launches in Q2FY21. With the diminished availability of capital for residential real estate development, the funds formed from WSBREDF-II will be stationed to provide financial assistance to developers to assure uniform cash flow and the timely fulfillment of projects.
Kaushik Desai, managing partner, Walton Street India Real Estate Advisors, remarked, "After the successful deployment of our first real estate debt fund, the focus of our second fund is to provide financing to developers with proven track records of execution across the mid-income housing sector in our key markets driven by end-user demand, to invest in key in-fill projects with full control over cash flow and visibility on financial closure and completion. We have received a tremendous response from the prior investors in WSBREDF-I for our second fund. We are pleased to have achieved the first closing with more than 70% of the target fund size already committed."
Following 2013, and before the launch of WSBREDF-II, Walton Street Capital India and BlackSoil had collectively placed more than Rs 1,500 crore of debt capital across more than 50 real estate transactions.