Real Estate Private Equity Term Sheet Template for India

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Key Requirements PROMPT example:

Real Estate Private Equity Term Sheet

"I need a Real Estate Private Equity Term Sheet for a USD 50 million investment into a mixed-use development project in Mumbai, with the investment structured through a Singapore-based fund investing into an Indian SPV, planned for March 2025."

Document background
A Real Estate Private Equity Term Sheet is a crucial document used in the initial stages of structuring private equity investments in Indian real estate projects or companies. It captures the essential commercial understanding between investors and developers/promoters before proceeding with detailed due diligence and definitive agreements. The document must comply with Indian regulatory requirements, including RERA for real estate projects, FEMA for foreign investments, and SEBI regulations for investment funds. It typically covers investment structure, valuation, governance rights, exit mechanisms, and key conditions while remaining partially non-binding to allow flexibility in final negotiations. This document type is particularly important in the Indian context where real estate investments often involve complex regulatory considerations and multiple stakeholder interests.
Suggested Sections

1. Parties: Details of the PE investor(s), promoters, and target company/SPV

2. Background: Brief overview of the project, parties involved, and purpose of the investment

3. Definitions: Key terms used throughout the term sheet

4. Investment Structure: Details of investment amount, valuation, and securities to be issued

5. Project Details: Description of the real estate project, location, and development plans

6. Use of Proceeds: Specified allocation of investment funds

7. Governance Rights: Board composition, voting rights, and management structure

8. Reserved Matters: Key decisions requiring investor approval

9. Transfer Restrictions: Lock-in periods and restrictions on share transfers

10. Exit Rights: Exit mechanisms including put options, IPO, strategic sale

11. Representations and Warranties: Basic confirmations from parties regarding authority and capability

12. Conditions Precedent: Conditions to be satisfied before investment

13. Confidentiality: Terms regarding confidential information

14. Binding Effect: Which provisions are binding and non-binding

15. Governing Law: Applicable law and jurisdiction

Optional Sections

1. Foreign Investment Compliance: Required when foreign investors are involved, detailing compliance with FEMA regulations

2. RERA Compliance: Required for under-construction properties, detailing compliance with RERA requirements

3. Environmental Compliance: Required for undeveloped land or construction projects

4. Tag-Along Rights: Optional protection for minority investors

5. Drag-Along Rights: Optional right for majority investors to force minority shareholders to join in sale

6. Anti-Dilution Protection: Optional protection against future down rounds

7. REIT Conversion Rights: Optional provisions for future REIT conversion

8. Green Shoe Option: Optional provision for additional investment rights

9. Asset Management Terms: Required when PE firm will provide asset management services

Suggested Schedules

1. Schedule 1 - Cap Table: Pre and post-investment shareholding pattern

2. Schedule 2 - Project Details: Detailed description of real estate project including plans and approvals

3. Schedule 3 - Conditions Precedent: Detailed list of conditions to be satisfied before investment

4. Schedule 4 - Reserved Matters: Comprehensive list of investor approval items

5. Schedule 5 - Property Documents: List of title documents and property-related approvals

6. Schedule 6 - Investment Schedule: Tranching details if investment is to be made in multiple rounds

7. Schedule 7 - Warranties: Detailed warranties to be provided in definitive agreements

8. Appendix A - Property Valuation Summary: Key metrics and assumptions from property valuation

9. Appendix B - Development Timeline: Project development and construction milestones

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions
Clauses
Relevant Industries

Real Estate Development

Commercial Real Estate

Residential Real Estate

Industrial Real Estate

Retail Real Estate

Hospitality Real Estate

Logistics and Warehousing

Mixed-use Development

Special Economic Zones

Data Centers

Relevant Teams

Legal

Investment

Real Estate

Finance

Compliance

Risk Management

Senior Management

Corporate Development

Asset Management

Project Management

Due Diligence

Strategy

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Chief Investment Officer

Real Estate Fund Manager

Investment Director

Legal Counsel

Compliance Officer

Development Director

Asset Manager

Investment Analyst

Real Estate Director

Managing Director

Partner - Real Estate

Vice President - Investments

Senior Investment Manager

General Counsel

Project Director

Risk Manager

Transaction Manager

Industries
Real Estate (Regulation and Development) Act, 2016 (RERA): Primary legislation governing real estate sector in India, ensuring transparency and protecting investor interests in real estate projects
Foreign Exchange Management Act, 1999 (FEMA): Regulates foreign investment in real estate and private equity, including specific regulations for foreign direct investment in real estate sector
Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012: Governs private equity funds operating in India, including real estate funds, establishing framework for fund structure and operations
Companies Act, 2013: Regulates corporate structure, governance, and operations of investment vehicles and real estate companies
Income Tax Act, 1961: Governs taxation aspects of real estate transactions and private equity investments, including capital gains and transfer pricing provisions
Transfer of Property Act, 1882: Fundamental law governing property transfers and real estate transactions in India
Registration Act, 1908: Mandates registration requirements for real estate transactions and documents
Environmental Protection Act, 1986: Establishes environmental compliance requirements for real estate projects
SEBI (Foreign Portfolio Investors) Regulations, 2019: Regulates foreign portfolio investments in Indian real estate and related securities
Indian Contract Act, 1872: Provides the basic framework for all contractual relationships, including term sheets and investment agreements
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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