An exclusive video webinar was held on YouTube. Mr. Sushant Pote was present as our webinar’s prestigious guest in this webinar. Mr Vikas Agrawal, the Founder & CEO of AIF & PMS Experts India Pvt. Ltd.
Webinar Overview
Our host and honourable guest tried to throw some light on the real estate investment structure in this webinar. They discussed how the investment procedure has changed and modified over the years. Mr. Sushant Pote tried to express the advantages of AIF investment in real estate over direct investment. He stated about the real-estate segments and opportunities related to it.
About AIF & PMS Experts India
At AIF & PMS Experts India, we have envisioned a vision of fostering trust in governance, maintaining transparency, and facilitating our client’s long-term wealth creation. Our numerous products, analytics, and tools are critical to our business and help us achieve our goals.
We have faith in India’sIndia’s growth story. We recognise the significance of investments as a driver of economic growth. And our Founder, Mr Vikas Agrawal, who is exceptionally passionate about decoding the strengths and untangling business and business management weaknesses, exemplifies this belief.
Fund Manager Profile
Sushant Pote previously worked for Portman Holdings, a US-based real estate developer and investor. Sushant graduated from the Government College of Engineering in Pune and held an MBA from IIM-Lucknow.
Sushant leads the real estate asset management vertical and has over 11 years of experience in the industry. His experience includes both offshore and onshore strategies, structures, and regulations. Sushant specializes in deal sourcing, project evaluation, and asset management. He has firsthand knowledge of markets such as Pune, Bangalore, Noida, Ghaziabad, and Tirupur.
Investment Philosophy:
Their investment philosophy is based on the ”3 Ps”. These are Promoter, Project, and Proposal.
Promoter:
- Excellent track record with financiers
- Developers who are RERA registered
- A strong management team
- High reputation based on construction quality, project completion on time, and customer satisfaction.
Project:
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- Locations with significant demand drivers, led by end-users
- Size- Mid-sized projects (or phases of a project) with a clear completion date of 4-6 years.
- Configuration entails unit sizes, specifications, amenities, and pricing in line with the relevant micro-market.
- The starting point:
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Proposal:
- Structured investment with adequate collateral
- Built-in downside protection with upside sharing flexibility
- A sizable minority stake in the project
- Clear visibility of cash flows allows for a smooth transition away from internal accruals.
- Maximum investment period of four years
- Securities:
Land/Development Rights Security Mortgage
Receivables hypothecation and cash flow escrow
Guaranteed by the promoter/Corporate
Additional collateral.
Process of Investing:
These five steps for their investment approach.
- Sourcing:
- Market scanning to identify opportunities based on investment criteria
- The market presence will be maintained.
- Investment Approval:
- Initial transaction underwriting
- Due diligence is preliminary.
- Due Diligence & Documentation:
- Transaction underwriting in great detail
- Thorough due diligence
- Final approval from the investment committee.
- Asset Management:
- The approach in collaboration with a partner
- Project Management & Development
- Management of finances
- The mechanism for auditing and controlling
- Meetings for strategic and tactical planning.
- Exit:
- Pricing for self-liquidation based on market forces
- Gain access to Axis Group’sGroup’s institutional clout
- At an advanced stage of the project, the developer seeks to refinance.
- In the contract, step-in rights for management takeover.
Real-estate Value Chain
Real estate is the ultimate consumer durable. It has high light utilitarian value.
It comprises various asset classes, such as residential, commercial, industrial, etc.
The three stages of this part are Land, Development and Built-Out.
Key Points
- The host and the guest discussed the real-estate segments (commercial, residential, retail, hospitality, industrial or warehousing).
- There are many investment opportunities through AIF.
- Our guest talks about a few catalysts regarding real estate, and also he mentioned how these shape todays’ investing procedure and transparency.
- He specially mentioned the RERA and its salient features.
Parting Note
Opportunities for real estate are numerous, but the investor should be aware and careful about the investing cycle. One should understand that bad things in real estate are not happen overnight. There’s a process of everything. That’s why close monitoring is important.