With funding proving to be a challenge for residential projects due to low liquidity among NBFCs, we foresee immense opportunity for developers in last mile financing. We are already seeing investors evaluating distressed assets, which typically already have approvals in place and unit sales commenced.
In such a scenario, we expect developers offloading assets at reasonable valuations. We can expect greater investor interest in distressed assets, especially at the last-mile funding stage (i.e. projects that have been stalled nearing completion stage), as some developers struggle with cash flow. While such assets can offer superior returns, we urge that only investors who have a track record in turning around stuck projects attempt to scout for such assets. We believe that now with the government’s Insolvency and Bankruptcy Code taking shape, investors can be more open to snapping up distressed assets.
We also recommend developers to continue to expand in the logistics sector by collaborating with corporate and government bodies owning land banks.