Shriram Properties, real estate arm of Shriram group, will raise ₹1,600 crore to acquire stressed assets in residential segment and develop commercial properties predominantly in the South.

Around ₹1,000 crore will be invested in acquiring stressed properties in Chennai, Bengaluru, Coimbatore, Visakhapatnam, Hyderabad and Kolkata. The rest will be used to develop office buildings in Bengaluru and Chennai. The company is in talks with investors who will be funding 80 per cent of the investment and the rest by Shriram Properties.

Addressing media persons, M Murali, Managing Director, said: “Post demonetisation, RERA and GST, there is a huge consolidation happening in the real estate market.” Many properties are stressed due to lack of funds, uncertainties in the market and legal issues. These owners are willing to sell properties. At the same time with growing middle class, there is a huge demand for affordable housing that is largely unmet.

“Considering our expertise in the segment in different cities, this presents huge opportunity for us,” he added.

The company is in talks with 10-12 agencies to acquire four properties worth 2.5 million sq ft. Of the 60 million sq ft of land the company owns, 18 million sq ft has been delivered and 20 million is under different stages of development. “About 80 per cent of the residential units developed are in mid-market segment and affordable housing segment with prices ranging from ₹35 lakh to ₹80 lakh,” Murali said.

Commercial space

In the commercial development space, the company is looking to develop office spaces for the IT and ITeS segment in SEZ model. The company will focus on Bengaluru, Chennai and Hyderabad for this segment.

While the commercial space development is already in progress in Chennai, which includes a mall in south Chennai, Murali said the company is looking for space in Bengaluru and Hyderabad.

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