Investors eye 170 stressed real estate projects in Bengaluru worth Rs 1000 cr


Bengaluru, Oct 8: Following the boom in the real estate sector amid the gloom on the employment front in the IT sector, the stressed assets pegged to be worth more than Rs 1,000 crores in Bengaluru are getting attention.

With the investment ecosystem becoming favourable and the availability of various funds focused on distressed assets, there are a lot of opportunities to be explored, say experts.

As per market sources, in Bengaluru, there are around 170 projects which are on hold or fall under the category of stressed assets.

These projects, which mainly belong to the mid and luxury segments, are spread across the North-West, North-East, South-East and South-West micro-markets in Bengaluru.

While 80 per cent of these projects are apartments, these assets also comprise villas, thus constituting 20 per cent of the total stressed assets. As far as the value of these projects is concerned, the current market value stands at around Rs 90 crores, explained sources.

Angad Bedi, Managing Director, of BCD Group told the mediaperson, “Stressed assets have a sizable share in the country’s real estate landscape, though the share has started to come down considerably after the post-COVID rebound of the sector. In Bengaluru, there are assets in the mid and luxury segments which are garnering attention to be redeveloped, thus unlocking a lot of potential.

“Last year we entered into a JV partnership with a leading fund manager and identified stressed residential projects of around Rs 1,000 crore, totalling five million sq. ft across Bengaluru,” he explains.  

Besides, the Centre’s Special Window for Affordable and Mid-Income Housing (SWAMIH) investment fund that successfully revived several projects will give a further push to the stressed assets that are spread across various micro-markets in Bengaluru. As far as the effect on the future of real estate prices is concerned, I think the revival of these projects will create a good supply of inventory, thus creating favourable buying conditions, Angad Bedi states.

Navin Dhanuka, MD and CEO, Aris Unitern talking to media explained, “In Bengaluru, there are more than 5 million sq.ft of projects that fall under the distressed categories. Mostly these projects fall under the mid and luxury segments, though there are a lot of affordable projects as well.

When it comes to the proactive steps that have been taken to de-stress or revive these assets, I think the emergence of various distressed asset funds by foreign and domestic players is changing the game. Besides a lot of big players have put into practice the development management model that is enabling smaller project owners and builders to complete their projects, explains Navin Dhanuka.

“There are professional agencies like us that are adept in lending funds, expertise, and end-to-end project management services to help developers complete a project. The government is intervening through the Special Window for Affordable and Mid-Income Housing (SWAMIH) investment fund, introduced in 2019 to relieve these assets. Overall, this will definitely influence the price. With the introduction of new supply, people will have more affordable options, while developers will be able to leverage on the economies of scale,” he said.