Piramal Group’s financial services arm, Piramal Fund Management has expanded its portfolio to offer flexi lease rental discounting (LRD). Through these transactions, the fund will discount future cash flows of completed and leased commercial assets including office blocks and retail malls. The fund has already identified an initial pipeline of deals and is in advanced talks with two developers–one each in Mumbai and Bengaluru–to conclude LRD deals totaling Rs 1,500 crore for their leased office complexes. The fund intends to scale its book size up to Rs 10,000 crore by 2017-18. The fund will be financing the developer up to 75% of the discounted cash flows from the property for tenure up to 12 years. While the LRD will be for 70% of the cash flows, additional 5% will be loan against property and the developer will be paying interest on this additional part only at the end of the tenure. The interest rate for these financing deals will be range between 10.25% and 11% on floating basis. The two LRD deals that are currently in advanced stage of discussions are for a 3.5 lakh sq ft and 3.3 lakh sq ft office projects with both leased up to 95%.Through flexi LRD, Piramal Fund Management will be focusing on the country’s top six property markets.
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