In a significant boost to commercial real estate financing, Avante Spaces, the real estate arm of Kirloskar Industries, has secured a ₹1,150 crore term loan from ICICI Bank, according to documents accessed via CRE Matrix. The funding will support the development of a large Grade A commercial office project in Pune, specifically in the rapidly evolving Kothrud micro-market.
Project Details and Financing Structure
The loan is structured across two tranches of ₹1,050 crore and ₹100 crore. Additionally, it comes with a defined repayment timeline of 44 months and carries an interest rate of 8% per annum. As a result, the financing supports a planned 1.9 million sq. ft. office development, reinforcing the scale and ambition of the project.
Meanwhile, to secure the loan, Avante Spaces has created a mortgage over its land parcels and all present and future constructions. Furthermore, the collateral includes approximately 7.25 acres of land across multiple plots in Kothrud. This ensures strong asset backing for the lender.
Axis Trustee Services has been appointed as the security trustee for the transaction, with the security interest formally created earlier this year.
Lender Confidence in Grade A Office Assets
This transaction highlights a broader trend. Institutional lenders are selectively backing high-quality commercial real estate projects. In particular, developers with strong parentage and clear visibility into execution continue to attract capital. Moreover, projects in established and emerging urban hubs remain preferred.
At the same time, Grade A office spaces are highly attractive to lenders. They continue to draw strong demand from corporates, technology firms, and global capability centres (GCCs). In addition, such loans are well-structured with clear repayment schedules. As a result, backing by tangible assets helps reduce risk while ensuring stable returns.
Kothrud’s Emergence as a Commercial Hub
Traditionally known as a residential locality, Kothrud is steadily transforming into a viable office destination. Improved infrastructure, better connectivity, and a growing preference for decentralised workspaces are driving this shift.
As businesses look beyond traditional central business districts, micro-markets like Kothrud are gaining traction. These micro markets offer a mix of accessibility, talent catchment, and relatively competitive costs.
A Positive Signal for CRE Financing
The Avante Spaces deal indicates a calibrated revival in commercial real estate financing activity. With occupier demand stabilising and a steady pipeline of developments across key cities, lenders are showing renewed confidence—albeit with a selective and cautious approach.
Overall, this transaction signals continued momentum in India’s office market, where well-backed projects in strategic locations are increasingly able to secure institutional funding.
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