Business Today

PEs get picky

The skies, says Brett White, President and CEO, CB Richard Ellis, are still clouded and the forecast, for capital investments in the commercial realty sector in India, remain gloomy.

     Print Edition: July 13, 2008

 Where’s the money flowing

PE players are investing in projects rather than in the promoter companies.

PE player: Lehman Brothers Real Estate

Project: Unitech’s 100-acre commercial complex on Western Express Highway, Mumbai

Amount invested: $175 million

PE player: Yatra Capital and Saffron India Real Estate Fund

Project: Parsvnath’s redevelopment of BEST Bus Depot, Kurla, Mumbai

Amount invested: Rs 186 crore

PE player: Merrill Lynch

Project: DLF’s middle-income residential projects in Chennai, Bangalore, Kochi and Indore

Amount invested: Rs 1,481 crore

The skies, says Brett White, President and CEO, CB Richard Ellis, are still clouded and the forecast, for capital investments in the commercial realty sector in India, remain gloomy. “Most PE funds in the US have adopted a wait-and-watch policy for their India investments,” he says.

The good news is that the demand-supply ratios are very positive for commercial real estate. “But increasingly, PE players are looking to invest at the project level through SPVs rather than at the enterprise level, as growth options are limited in the latter option,” says Sandeep Singh, Director, Capital Markets Group, Cushman & Wakefield.

Also, PE companies are including “parachute” clauses. “That means such deals are structured to allow the investor a safety option. If the project goes kaput, it’s the investor who will be bailed out first rather than the promoter,” says Singh.








Tejeesh N.S. Behl

Youtube
  • Print

  • COMMENT
BT-Story-Page-B.gif
A    A   A
close