Resolüt advised Investcorp on legal, regulatory and real estate aspects relating to their acquisition of 2 education infrastructure assets in Tamil Nadu, India. The deal involved structuring a long-term partnership with a leading global school operator.
For background, 'EduInfra' is an emerging asset class in India. It's attractive tointernational annuity investors looking for stabilized yield plays. The sector has an edge over other similar asset classes due to its non-GDP linked and rather recession proof character with significant potential for capital appreciation. It offers a 10 – 11% entry cap rate with rental escalations in the region of 3 – 5%. While the market boasts of significant depth, potential has not been unleashed as operators are only slowly moving towards asset light models.
Interestingly, EduInfra's classification as infrastructure allows for tax optimal exit through InvITS, which may either be publicly listed or privately listed. InvITs have recently emerged as the preferred vehicle for institutional investors, not just looking for annuities but also growth assets.