ARCs see big gains in realty as stressed assets turn viable

ASSET RECONSTRUCTION COMPANIES (ARCs) are increasingly turning their attention to real estate, with nearly one-fourth of their new acquisitions this year coming from the sector.

- KSHIPRA PETKAR & MAHESH NAYAK

"The shift is driven by a combination of rising property values, banks and non-banking financial companies (NBFCs) offloading stressed projects, and the renewed viability of previously stuck developments," a CEO of an ARC told FE.

He added: "The past three-four years, real estate prices, particularly in NCR, Bengaluru and Hyderabad, have doubled compared with the pre-Covid levels. This surge has transformed many stalled projects into viable opportunities. Where construction costs once outweighed potential returns, higher sale prices now allow ARCs to step in, fund completion, and unlock value."

Hari Hara Mishra, CEO, Association of ARC, said: "Momentum in the real estate space by ARCs has certainly gathered pace this year. In 2020-21, post-Covid, activity was virtually negligible, with a few deals in 2023 and 2024. It's now gathering pace, driven by a more conducive regulatory environment, returning demand, funding support and the presence of specialised investors."