Total Environment, a Bangalore-based real estate developer, secures over INR 1,600 crore funding, accelerating residential project delivery across Bangalore spanning 12 million sq. ft. The funding, sourced from top banks, comes after robust residential sales performance. Founder Kamal Sagar attributes their strategic exit from expensive debt to sales focus and market uptrend, enabling loans at lower interest rates (9.7% to 12.5%). This shift from higher-interest investments marks Total Environment's transition, aiming to deliver 100 homes monthly. The move aligns with the booming Indian residential sector, witnessing heightened sales and increased investments, positioning Total Environment advantageously in Bangalore's competitive market.
Bangalore-based real estate developer Total Environment has secured over INR 1,600 crore in funding from leading banks and financial institutions. This significant capital injection will accelerate the delivery of their ongoing residential projects across Bangalore, encompassing a total area of approximately 12 million square feet.
The funding comes on the heels of robust residential sales performance for Total Environment. Kamal Sagar, the founder, explains that their focus on sales and the recent surge in the residential market allowed them to exit expensive debt. This strategic move enabled them to secure loans at more favourable interest rates, ranging from 9.7% to 12.5%, from prominent institutions like State Bank of India (SBI), Standard Chartered Bank, ICICI Bank, Axis Bank, and RBL Bank.
The lower cost of funding will allow Total Environment to expedite construction and deliver their custom-designed homes at a faster pace. Their ambitious target is to deliver 100 homes per month, catering to the high demand in the Bangalore market.
This funding round marks a significant shift for Total Environment. Previously, the company relied on investments totaling INR 2,070 crore from domestic and foreign entities at higher interest rates (between 14% and 20% per annum). These investments were made between 2015 and 2019 by entities such as Brookfield Asset Management (who invested INR 800 crore in five projects totaling 4.5 million sq. ft), HDFC Capital (who invested INR 229 crore in a Whitefield project encompassing 1 million sq. ft), HDFC Bank, and L&T Finance.
Founded in 1996, Total Environment has established a unique position in the market with its focus on custom-designed homes. They prioritize "People-Centred Design," ensuring their homes are built with care and craftsmanship to meet the specific needs of each resident. They have also integrated vertically, managing the production of furniture, doors, windows, metalwork, and property management services for life.
Total Environment's success reflects the current boom in the Indian residential sector. Rising demand, coupled with a need for increased working capital, has led to a surge in debt transactions within housing projects. This trend has attracted significant investments from private equity and real estate credit funds, including Nisus Finance, PAG Asia, ASK Property Fund, and HDFC Capital, further fuelling the sector's growth. During the first quarter of 2024 (January-March), the residential property market witnessed a notable expansion attributed to increased supply from reputable developers, stable economic conditions, and favourable buyer sentiments. Residential property sales reached a historic peak in Q1 2024, recording a remarkable 20% surge compared to the same period in 2023, with a total of 74,486 units sold. This marks the second consecutive quarter where sales surpassed 74,000 units, following the exceptional performance in Q4 2023 (75,591 units), according to JLL.
With strong sales, lower-cost funding, and a focus on customer-centric design, Total Environment is well-positioned to capitalize on the thriving residential market. Their commitment to faster delivery times and innovative home designs will be key differentiators in the competitive Bangalore market.
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