New York-based Trikona Capital will invest one billion dollars in slum redevelopment projects in Mumbai city.
Trikona will develop a total of 100 million sq ft of residential space as part of its "city rejuvenation project" and has tied up with Lokhandwala Builders for its first project in central Mumbai, company managing director and co-founder Aashish Kalra said.
This is part of the $ 2.5 billion the company plans to invest in the Indian residential sector over the next three and a half years. "We expect to bring in a further one billion dollar each year after that," Kalra added.
The 1.37 million sq ft project is slated to start by early 2007 and completed by 2009 and is valued at approximately $ 100 million. He said that as part of the redevelopment project, the group's infrastructure fund will invest in building basic infrastructure around the projects.
Kalra said that the group has also identified around 10 million sq ft that it would invest in developing in partnership with local developers and is looking for more partners.
Slum redevelopment projects are typically low income housing. In return for developing these projects, the state government gives the developers the right to develop additional higher income housing, either on the same plot or elsewhere. Mumbai has a shortage of around 950,000 such housing units, according to a McKinsey report.
Trikona is also planning a $ 1 billion residential fund for India, which will focus on metros such as Delhi and Mumbai.
"Around 40-50 per cent of the values for these developments will come from cities like Delhi and Mumbai with about 20 per cent of the volume. Second tier cities will contribute around 80 per cent of the volumes and 20 per cent of the values for these projects," Kalra said.