Xander Finance Pvt. Ltd has provided Rs135 crore in structured debt for the upcoming Trump Tower project in Kolkata to finance land acquisition and construction.
The non-banking financial company (NBFC) has also extended Rs107 crore of structured debt to Chennai-based real estate developer Akshaya Pvt. Ltd to refinance loans and for general corporate purposes, a top official at the non-banking financial company (NBFC) said.
Trump Tower on Kolkata’s EM Bypass is being developed by Unimark Group, RDB Group and Tribeca Developers, with 136 high-end residential units spread across two acres.
“2017-18 has been a big year for Xander Finance in terms of deployment and we expect the same to continue going forward. As demand for capital remains high with banks being cautious on lending to corporates and real estate developers, there are very good opportunities for wholesale NBFCs to step in and offer flexible and customized financing solutions,” said Amar Merani, managing director and CEO, Xander Finance.
Donald Trump Junior, the eldest son of US President Donald Trump, visited India in February, when he toured cities where Trump projects are coming up.
In India, Trump Organization works with local developers via brand licensing agreements and does not make any equity investments. So far, it has signed partnerships with different local developers such as Lodha Group in Mumbai, Pune-based Panchshil Realty, M3M and Ireo in Gurugram and Unimark Group in Kolkata. According to a 17 February report by New York Times, Trump Organization has earned as much as $3 million in royalties in 2016 from its businesses in India.
Kalpesh Mehta, founder of Tribeca Developers said 80% of the Kolkata project has already been sold. “A Trump product priced at between Rs5-7 crore (an apartment) represented an extremely attractive opportunity for our customers to own a trophy asset,” Mehta said.
In the Akshaya transaction, Xander has provided late stage debt financing against the former’s four completed projects – two residential, a plotted development and a commercial office- of the developer.
“The structured (debt) transaction involved pooling of multiple asset classes like residential, commercial and plotting with an extended repayment moratorium which provides additional liquidity towards the enterprise requirements. The market today presents attractive opportunities and this deal helps the group with the needed growth capital that is in sync with the longer enterprise objectives,” said Akshaya chairman and CEO T. Chitty Babu.
Over the last four years of real estate slowdown, NBFCs have continued to lend aggressively to developers. With banks cautious about lending to real estate, NBFCs have stepped in with flexible terms of repayment, during a time when project cashflows remain tepid.
“Equity is limited and accessible to only the top few developers which is why NBFCs come to the rescue to many who need last mile financing, refinancing of loans or construction and payment of land. We expect the pace of NBFC lending to continue,” said Shobhit Agarwal, managing director and CEO at investment banking firm ANB Capital Advisors Pvt. Ltd.