Piramal Fund Management (PFM), the financial services division of Piramal Enterprises, has sanctioned investments worth approximately Rs 2,000 crore within three months of launching its Flexi Lease Rental Discounting (LRD) for completed commercial assets that include office and retail space across the country.
Lease Rental Discounting (LRD) is a term loan offered against rental receipts derived from lease contracts with corporate tenants. The loan is provided to the lesser based on the discounted value of the rentals and the underlying property value.
In addition, it has also recently approved two investments under Flexi LRD against marquee assets in Mumbai and the NCR region. These investments includes Rs 440 crore against the Wadhwa Group’s commercial property located in the prime business district of Bandra Kurla Complex in Mumbai and a Rs 580 crore against ASF Group’s IT SEZ development – ‘ASF Insignia’ in Gurgaon. Prior to these, Piramal Fund had earlier approved LRD transactions with Reliable Group in Mumbai and Mantri Group in Bangalore too.
“We are delighted with the industry response to our recently launched product Flexi LRD that aims to lend substantial quantum of money on flexible terms against a marquee asset of a Tier 1 developer," said Khushru Jijina, Managing Director, Piramal Fund Management in a Wednesday statement.
In November 2016, the Fund had announced its target for LRD to be Rs 10,000 crore for the next 12-15 months and it has already achieved 20 per cent of this target it within three months of its launch.
"Through these transactions, we have further strengthened our relationship with the Wadhwa Group, an existing ‘Piramal Preferred Partner’, with whom we have done multiple investments in the past as well as initiated a new relationship with the ASF Group. We remain positively inclined towards commercial as an asset class and look forward to actively scaling up our position within this space,” Jijina said.
According to Navin Makhija, Managing Director, Wadhwa Group, Piramal Fund Management is one of the most respected financiers in the real estate industry its LRD offering will allow his company to leverage its marquee projects and fund developments that we have in the pipeline.
"Our proven track record of completing projects on time and being financially viable has allowed us to successfully partner with Piramal.” he added.
Piramal Funds stated in its release that Wadhwa Group has already delivered over 11 million sq. ft. of prime real estate (of which 6mn sq. ft. is commercial real estate) with many landmark projects to their credit. "PFM has committed Rs 440 crore under a 7 year facility with proceeds being used towards a takeover of loans from existing lenders and reduce the overall cost of funds for existing projects of Wadhwa Group," it said.
The Wadhwa LRD deal is secured against an exclusive mortgage of the project, of which 98 per cent is leased, with charge overall present and future receivables. While, the ASF Group has delivered 3 million sq. ft. of IT and commercial assets. Its ASF Insignia SEZ is a Grade A IT office space located on the Gurgaon Faridabad road. The 9.2 lac sq. ft. building is fully leased to marquee MNC tenants including TCS, IBM and Ericsson and PFM has committed Rs 580 crore out of which Rs 435 crore is disbursed.
BW Reporters
Unnikrishnan is currently Senior Associate Editor with BW Businessworld at its Mumbai Bureau. During his two decades long journalistic career, he has received several media awards and recognitions. His articles on healthcare, life sciences and intellectual property rights (IPR) have been republished by several international blogs and journals.
