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Kuldip Chawlla
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Kuldip Chawlla, director, Red Fort Capital, a realty-focussed private equity firm, tells Rajesh Kulkarni that the ongoing global liquidity squeeze has fuelled a 50% jump in funding proposals from leading developers from across the country

Could you give a background about Red Fort India Real Estate Fund?

Red Fort India Real Estate Fund I.L.P. is an international real estate private equity fund with an allocation of over US$400 million  (Rs199  crore) to the Indian real estate market. Our investors include international public, corporate and union pension plans, as well as insurance companies, foundations, endowments and governments.

It is a unique investment management firm with professionals that have over thirty years of Indian real estate experience combining international real estate development, finance and capital market expertise.

Our focus is on real estate investment opportunities in India, paying particular attention to the outskirts of congested cities and rapidly growing smaller cities across the country.

You have announced investments to the tune of Rs3,200 crore in the Indian real estate sector. Which are the cities you are targeting?

Since the onset of the global financial crisis, the number of proposals coming to us has increased by over 50%. Some of them are from reputed developers whose foreign partners have backed out. We are in the process of closing a number of transactions in key cities.

The plan is to pick up 50% stake each in 10-12 projects in cities such as NCR, Mumbai, Bangalore, Kolkata, Chennai, Pune and Hyderabad. These projects will primarily comprise residential, commercial, budget hotels, warehousing and logistics spaces.

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COMMENT Comment on this article

The micro market of the city of investment is very important. The rate at which jobs are being created show the sense of demand there will be for housing, whether it is affordable or luxury. This information can be attained from national databases and head-hunters.

The wages that will be given to the employees decide the type of the house that would be required, for example, a 2- or 3-BHK.

What are your investment plans with regard to affordable housing projects and budget hotels in Tier I & II cities?

We plan to build affordable houses in the range of Rs8-24 lakh. These houses will range from 400 sq ft to 1,000 sq ft. The aim is to target the middle income groups earning between Rs2 lakh and Rs6 lakh p.a. We have also developed a patented technology that uses fly ash based cellular light-weight concrete. It can help save 10% of the construction cost for high rise structures while using eco-friendly materials. We will construct affordable houses on the outskirts of congested cities.

We are also planning to invest in 4-8 budget hotels in Tier I and II cities. Our plan is to invest with experienced hotel operators to bring out a chain of budget hotels pan India.

Could you name the key projects your fund has invested in so far? What has been the scope of investment in each?

We have made significant investments in Bangalore, Chennai and Hyderabad. In Bangalore, we have tied up with the Prestige Group for two projects.

In Chennai, we have acquired primary residential land in close proximity to Ambattur, an emerging IT hub. We have also tied up with Kishorkumar Gokaldas, Promoters and Developers (KG Foundations Private Ltd), to develop a gated residential community on its 11-acre land parcel in Chennai.